Bitcoin was trading near $77,733 as of noon Hong Kong time, according to CoinDesk data, and was little changed over the past 24 hours, after sliding as low as $76,685 and failing to hold above $78,000 during U.S. trading hours.
The positioning of the derivatives suggests that the recent sell-off may be more due to leverage than the start of a broader market collapse. Open interest, a measure of outstanding leveraged futures positions, remained relatively stable while funding rates remained low or negative, a sign that traders were not aggressively jumping into bullish bets ahead of the decline.
“There was no massive accumulation of leveraged long positions before this, meaning that most of those liquidated during this decline were leveraged funds attempting to fish on the short-term bottom. Second, this indicates that we are not in the midst of a structural downtrend reversal. The temporary bottom of $75,000 to $77,000 remains well defined,” Tim Sun, senior researcher at HashKey Group, told CoinDesk.
The bigger problem, he says, is macro: Investors are reducing their risks as long-term yields rise, oil and inflation risks remain in focus, and there is “currently no compelling reason for new capital to enter the market.”
Data from CoinGlass showed $200 million in cryptocurrency liquidations over the past 24 hours, split almost equally between long and short positions, suggesting the move was less a unilateral capitulation than a volatile market whipping both ways.
Sun pointed out that the 30-year US Treasury yield, which recently exceeded 5%, is the biggest pressure point. Higher long-term yields tend to weigh on speculative assets by increasing the opportunity cost of holding non-yielding assets like Bitcoin, while tightening broader financial conditions.
The next catalyst could come from geopolitics.
Sun said a significant de-escalation of tensions between the United States and Iran could cool oil prices and inflation expectations, easing pressure on yields and giving Bitcoin room to rebound.
But if yields remain elevated and geopolitical risks persist, bitcoin could remain stuck in what he described as a defensive range-bound market, with the $75,000-$77,000 area serving as a key near-term support level.
