The derivatives market is undergoing a historic contraction following confirmation that Bitcoin open interest plummeted by $55 billion over the last 30 days. Data from CryptoQuant reveals that this reduction is equivalent to the closure of approximately 744,000 BTC in positions, reflecting massive deleveraging across major platforms like Binance and Bybit as the asset struggles to remain above $70,000.
This entire movement suggests that price weakness is not solely a response to spot market selling, but also to a systemic liquidation of leveraged positions. The impact is further aggravated by an increase in exchange inflows, which surpassed 137,000 BTC in early February, heightening immediate selling pressure and shifting investor sentiment toward a state of extreme caution.
In the short term, analysts will observe whether exchange reserves exceed the critical threshold of 2.76 million BTC, which could trigger a final capitulation. While experts like Mark Cullen do not rule out a drop toward $50,000 in a bearish macro scenario, the market is searching for signs of prolonged consolidation to establish a lasting floor in the current price structure.
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