A combination of both indicators indicates that the current regime is consolidating or bearish, and that a final capitulation is likely to occur soon.
The current market dynamics point to a recovery in the movement that Bitcoin is losing. However, the leading digital asset is yet to mark the end of this bear cycle, despite cooling market conditions.
According to a report by CryptoQuant, metrics such as the decline in open interest and the compression of the Bitcoin base on the Chicago Mercantile Exchange (CME) indicate continued depreciation.
More pain for BTC?
The underlying compression of the CME is the futures yield curve, which reflects the demand for long exposure. The curve has been in a downtrend since 2025, following the patterns that preceded the bear markets of 2019 and 2022. However, the slope remains positive to date. While the current slope of the line suggests that demand for leverage and appetite for risk is cooling, the market has not yet reached the conditions historically associated with capitulations. It confirms continued gradual decline, but not surrender.
The compression of the yield curve currently indicates weaker demand for long-term exposure as market participants become less willing to accept premiums for exposure to Bitcoin (BTC). This suggests a weakening of dominant beliefs and a more neutral or condescending background. However, long-term contracts still trade at a premium to spot and short-term futures.
Essentially, the curve reflects the environment in which price movements can be encountered until a cyclical bottom of resistance is formed. Past period bottoms have only occurred when the slope of the yield curve has turned negative, indicating a sharp pullback and decline. This means that BTC still has more downsides.
A cyclical bottom is coming soon
Additional evidence that the Bitcoin market is experiencing a gradual repositioning, rather than the extreme pressure needed to form a bottom, is the decline in open futures interest. This metric has fallen sharply from its peak in 2025 following a trend seen in the bear market of 2022.
CryptoQuant found that open interest in CME Bitcoin futures fell 47%, similar to the 45% decline seen in 2022. Such a move reflects a major rebound in leveraged positions after a period of increased participation. This reversal is characterized by prolonged liquidation, reduced speculative demand, and low hedging activity, confirming an ongoing cycle.
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The combination of declining open interest and a positive yield curve suggests that the current mode is a consolidative or bearish average, and that a final capitulation is likely to occur soon.
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