Bitcoin's open interest has dropped to levels unseen since 2022, signaling a potential shift in market dynamics. This metric often reflects trader positioning and leverage appetite—when it contracts sharply, two scenarios typically emerge: either the market is consolidating before a major move, or we're witnessing early signs of a trend reversal.

The current downturn in open interest raises questions about what comes next. Are we seeing capitulation from overextended traders, or is this simply a pause before renewed bullish momentum? Market participants are closely watching whether this compression will lead to a period of range-bound trading or trigger a directional breakout.

For traders monitoring on-chain metrics, this development warrants attention as a potential inflection point. The answer likely depends on broader macro conditions and Bitcoin's ability to hold key support levels in the coming sessions.