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The market data now shows a picture of Bitcoin that is far more complicated than a simple price decline, and the cryptocurrency has entered a critical phase. Although Bitcoin has fallen below $92,000, the true story lies not only in the candle on the chart, but also in what’s going on underneath.
Leverage pours in
The price is dropping, there is more public interest, CVD is disintegrating. That combination is a breakdown dominated by derivatives, rather than typical spot-driven selling. Traders are opening more positions during the decline, rather than closing them when the price is falling, and open interest is increasing. The market is being entered by pure leverage, mostly shorts. This behavior is not passive but rather aggressive.
Futures traders increase risk and volatility by essentially betting on further declines as they occur. Next, the cumulative volume delta, or CVD, is rapidly decreasing. That indicates a decline in spot buyers. Those who are prepared to pay actual money for actual Bitcoin are leaving. At least for now, there is not a demand floor. As a result, rather than natural supply and demand dynamics, the market becomes extremely sensitive to liquidation flows.
Bitcoin in key range
Instead of fundamental selling pressure, what we are currently witnessing is a market driving itself downward through momentum and leverage. This is crucial because it creates the conditions for one of two possible outcomes. The long side is severely liquidated if the price keeps declining. Forced selling could push Bitcoin further into the $80,000 range, as the high-leverage long positions that were accumulated over the previous two months unwind.
However, there is an equally violent alternative. A market with a lot of liquidation liquidity is one that is overflowing with new shorts. Every late short becomes a target if Bitcoin even momentarily stabilizes, particularly if spot buyers reenter the market. In a vicious short squeeze, a single dramatic reversal could cause the market to soar. It would not be shocking to see a 5-10% candle in a single move, not because sentiment changes, but rather because positioning gets blown out.
An investor-driven market does not exist here. Instead of long-term conviction, it is a trader’s battlefield, shaped by leveraged bets. Although it is currently dangerously unbalanced, Bitcoin is still alive. There will be a liquidation on one side. Which one breaks first is the only question.
Dan Burgin
Vladislav Sopov
U.Today Editorial Team