Bitcoin Sentiment Index Falls Below Neutral Threshold

The Bitcoin Advanced Sentiment Index has dropped sharply to 46.1%, falling beneath the neutral 50% mark after reaching highs above 80% just last week. This decline occurred even as Bitcoin’s price rebounded to approximately $106K, indicating a disconnect between price action and market sentiment.

This divergence is largely attributed to a significant contraction in Open Interest (OI), which plummeted from $37.8 billion to $33.7 billion, reflecting a $4.1 billion capital withdrawal. Such a reduction in OI typically signals traders are closing positions to mitigate risk, resulting in thinner liquidity and an increasingly bearish market environment.