Bitcoin Recovers Above $112,000, Boosted by Weekend Gains

In brief

Bitcoin recovered to $112,000 Monday morning, recovering losses sustained during last week’s price slump.
CME-based Bitcoin futures and options products saw a $4.33 billion decline in open interest between September 18 and 26.
Crypto-native investors remained optimistic despite last week’s liquidation event, supported by an $800 million uptick in open interest and rising funding rates.

Bitcoin recovered above $112,000 Monday morning, supported by a surge in buying pressure noted during the weekend.

As a result, the top crypto is up 2.5% in the past 24 hours, undoing most of last Thursday’s losses, per CoinGecko data. Buoyed by Bitcoin’s strength, altcoins have also soared higher, resulting in a $354 million liquidation spree and the total cryptocurrency market capitalization nearing the $4 trillion mark.

Bitcoin’s Monday morning rise reflects “a mix of macro relief, with a softer U.S. dollar and steadier rate expectations, alongside a cleaned-up leverage after recent liquidations and renewed accumulation from larger players,” Farzam Ehsani, CEO and co-founder of VALR, told Decrypt.

The broader crypto market losses noted last week were primarily driven by quarter-end rebalancing, experts told Decrypt. Open interest for CME’s Bitcoin futures fell by $2.83 billion to $14.73 billion between September 18 and 25, while options dropped by $1.50 billion to $4.63 billion over the following two days, per Velo data.

U.S. spot Bitcoin exchange-traded funds also saw net outflows last week as part of the quarter-end basis unwind, as noted by Singapore-based trading desk QCP Capital in its Monday post. Experts who previously spoke to Decrypt also noted the ETF outflows were not a sign of weakness, but a sign of buyer strength.

Signs of optimism?

While sophisticated traders across CME’s products resort to rebalancing, perpetual traders in the cryptocurrency space have doubled down despite last week’s brutal liquidation events.

“Optimism is re-emerging,” QCP Capital noted, citing the growth in open interest for Bitcoin’s perpetuals from $42.8 billion to $43.6 billion, coupled with positive funding rates.

On prediction market Myriad, launched by Decrypt‘s parent company DASTAN, users expect Bitcoin to close out September above $105,000, but remain divided on its long-term outlook. Predictors place a 57% chance on Bitcoin dipping to $105,000 rather than surging to $125,000, continuing a broadly bearish trend that kicked off with last week’s price slump.

All eyes are now on September’s Nonfarm Payrolls, scheduled for Friday, which could be delayed if the U.S. government shuts down.

Despite near-term uncertainty, investors remain bullish, as Bitcoin is poised to enter a historically bullish fourth quarter with a median return of 52%.

“Bitcoin will continue to anchor sentiment, especially with the halving narrative getting closer,” Shawn Young, chief analyst of MEXC Research, told Decrypt.