There’s been a drawdown in Bitcoin futures contracts over the past couple days, with $1.25 billion worth of open interest leaving the past day—and analysts say that’s good for the BTC derivatives market.

The open interest in Bitcoin futures contracts has sunk to $80.8 billion from $85 billion as of Tuesday afternoon after steadily falling each day since last Thursday, according to crypto data aggregator Coinglass.

“The flush has reduced open interest and is more likely a healthy reset than a bearish warning at this stage, as it purged excessive leverage, stabilised speculative positioning, while maintaining key support at $112K for BTC,” Jean-David Péquignot, chief commercial officer at Deribit by Coinbase told Decrypt.

Analysts at exchange Bitfinex agreed there’s no reason to worry yet. They told Decrypt that investors should think of current market conditions as “a temporary cooldown, following volatility peaks that have created some large liquidations.”

Deribit’s Péquignot said whether this recent draw down really works as a reset depends on macroeconomic clarity and price stabilization. “Failure to hold supports could shift sentiment bearish,” Péquignot warned.

The macroeconomic outlook is still murky, though.

In a speech at the Greater Providence Chamber of Commerce in Rhode Island earlier today, Federal Reserve Chair Jerome Powell sounded less alarmed about tariffs than he did earlier this year. But Powell didn’t offer many clues about the Federal Open Markets Committee’s remaining two meetings.

“The overall economic effects of the significant changes in trade, immigration, fiscal and regulatory policy remain to be seen,” he said. “A reasonable base case is that the tariff-related effects on inflation will be relatively short lived—a one-time shift in the price level.”

Powell said that the Federal Open Markets Committee faces a harrowing task trying to balance the impact of lowered interest rates on inflation and the job market.

“Our policy is not on a preset course,” he said. “We will continue to determine the appropriate stance based on the incoming data, the evolving outlook, and the balance of risks.”

Investors await the next consumer spending print from the Bureau of Labor Statistics on Friday morning. Analysts are expecting the August data to show consumer prices rose 2.7% in August, up from 2.6% in July, according to analysts surveyed by the Dow Jones Newswires and The Wall Street Journal.

Bitcoin was recently trading for $111,904, about 0.7% lower than it was this time yesterday, according to crypto price aggregator CoinGecko. BTC is off more than 4% over the past week.

“Funding rates are still in the normal range and liquidations are normalizing, a classic sign of risk being flushed,” Bitfinex analysts said. “We don’t see any sign of structural change until we see huge spot selling or exchange withdrawals.”

Péquignot said lower trading volume means that BTC investors should proceed with caution, but good news from the PCE print could set the stage for a Bitcoin recovery.

“Dovish signals could drive BTC towards $120,000, while hawkish tones may retest $110,000,” he said. “With October’s bullish seasonality approaching, this retreat could pave the way for a V-shaped recovery, but vigilance is key to avoid further volatility traps.”