The Bitcoin derivatives market is showing signs of a fresh, bullish recovery, according to a up-to-date morning report from network analyst Axel Adler Jr., who said the rising Bitcoin positioning index along with a surge in open futures indicate up-to-date risk-taking rather than a tiny squeeze. For traders monitoring whether the recent recovery is structural, this distinction is significant.

At Adler’s structurethe key signal is the 30-day moving average of the Bitcoin Positioning Index, which rose to 4.5, its highest reading in four months. The daily index itself rose to 40.1, while Bitcoin futures open interest as measured over a 30-day period rose 14.5%, one of the highest readings in the last 120 days.

Bitcoin futures show a up-to-date risk setup

Collectively, Adler argues, these numbers suggest that the market is not just displacing obsolete, bearish bets. Adds fresh exposure. He described the change as a noticeable turnaround from the setup seen earlier this year. In February, the SMA-30d index hit a low of -10.9 as Bitcoin fell below $63,000. Since then, the metric has increased by more than 15 points, moving from what Adler described as a broken positioning structure to one that is steadily improving rather than rapidly waxing and waning.

The report emphasizes the combination of signals. Adler wrote that if the SMA-30d Positioning Index increases and the number of open positions decreases, the market will be more likely to clear ancient positions. However, if both augment together, it suggests that up-to-date capital and up-to-date leverage are entering the trade.

That’s what he thinks the market is showing right now. “What we are seeing now is exactly the second scenario,” Adler wrote. “The 30D OI percentage change is +14.5%. This is one of the two strongest readings in the last 120 days. Moreover, 23 of the last 30 days ended with a positive OI. This is a sustained rebuild of upward leverage.”

This point goes to the heart of the report. The bullish price movement resulting from the development of a position may be edged but short-lived. A move supported by an augment in open interest and improved directional positioning usually carries a different message: participants are taking up-to-date risks and doing so with enough consistency to change the broader structure of derivatives.

Adler also compared the current setup to January, when the daily Positioning Index briefly increased but did not translate into a lasting trend. “In January, the daily positioning index also briefly rose above +20 and +30, but the structure quickly deflated and OI did not provide the same confirmation,” he wrote. “The current setup is much stronger: the smoothed SMA-30d trend is moving up and OI is simultaneously confirming the inflow of new leverage. This is not a single impulse – it is a coordinated move across two indicators.”

However, this does not mean that the setup is risk-free. The report makes it clear where the structure will begin to fall apart. Adler said the first warning sign would be if open interest rates fell below zero within 30 days, which would mean deleveraging again. The second deterioration signal would be for the SMA-30d to drop lower and return below zero, turning what currently looks like a sustained build into a failed spike.

For now, Adler’s base case scenario remains constructive as long as both conditions are met: positive OI and increasing positioning average. The larger implication is that Bitcoin’s recent recovery, at least in the futures market, is being accompanied by a broader desire to re-leverage.

At the time of publication, the BTC price was $78,620.

Featured image created with DALL.E, chart from TradingView.com