Bitcoin (BTC) experienced a sudden market correction on [Date], erasing $120 million in open interest as the market recovered from a week-long sideways movement. The sharp decline, which saw the price drop from approximately $62,000 to just around $59,900, exposed the vulnerability of over-leveraged long positions.
According to data from CoinGlass, around 2,000 BTC in open interest was wiped out during the price plunge, leading to a total of 224,614 aggregated liquidations. The price action and subsequent weak recovery signaled continued market fragility, as buyers struggled to regain control.
Market Indicators Reveal Over-Leveraging
Market indicators such as cumulative volume delta (CVD) and funding rates highlighted the pressure faced by traders. The CVD saw a sharp drop during the price decline, reflecting strong selling pressure. Simultaneously, funding rates shifted from positive to negative, indicating a shift from bullish to bearish sentiment.
High Leverage Around $60,000
A liquidation heatmap for the BTC/USDT perpetual contracts on Binance revealed that many traders were using high leverage, particularly around key psychological levels like $60,000. Several horizontal bands below the $60,000 level indicated additional liquidation pockets extending toward lower price levels.
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Sell Pressure Continues to Suppress Bitcoin
As the dust settled, Bitcoin’s market continued to face pressure from an imbalance in buy and sell orders. Exchange market depth data revealed a substantial rise in sell orders, with 53,000 BTC on the sell side compared to 47,000 BTC in buy orders.
This imbalance has kept Bitcoin’s price subdued, with the market showing little sign of a strong recovery. Adding to this pressure are external factors, such as the U.S. government and FTX creditors moving large amounts of BTC into exchanges.
As a result, Bitcoin’s price remains stuck in a narrow consolidation range around the $60,000 mark, reflecting an extended period of uncertainty and volatility.
