bitcoin was trading near $77,733 at midday Hong Kong time, according to data from CoinDesk, little changed in the past 24 hours, after falling as low as $76,685 and failing to stay above $78,000 during US trading hours.
Positioning in derivatives suggested that the recent sell-off may have been more of a leverage explosion 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 accumulating bullish bets before the decline.
“There was no massive build-up of leveraged long positions before this, meaning the majority of liquidates in this dip were leveraged funds trying to fish for the short-term bottom. Second, this indicates that we are not in the midst of a structural downtrend reversal. The temporary bottom at $75,000 to $77,000 remains well defined,” Tim Sun, principal researcher at HashKey Group, told CoinDesk.
The biggest problem, he said, is macro: Investors are de-risking as long-term yields rise, oil and inflation risks remain the focus, and “there is currently no compelling reason for new capital to enter the market.”
CoinGlass data showed $200 million in cryptocurrency liquidations in the past 24 hours, split almost evenly between long and short positions, suggesting the move was less a unilateral capitulation than a volatile market whipping in both directions.
Sun pointed to the 30-year US Treasury yield, which recently surpassed 5%, as 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 may come from geopolitics.
Sun said a significant reduction in tensions between the United States and Iran could cool oil prices and inflation expectations, easing pressure on yields and giving bitcoin room to recover.
But if yields remain elevated and geopolitical risks persist, bitcoin may remain stuck in what he described as a defensive and range-bound market, with the $75,000 to $77,000 area as a key short-term support level.
