Bitcoin and Ether Under Pressure as Deleveraging Accelerates Across Crypto Markets
Bitcoin and Ether continued to trend lower as an accelerated deleveraging cycle triggered widespread liquidations across crypto derivatives markets, reinforcing bearish momentum in the near term. Forced unwinds of leveraged long positions dominated trading flows, pushing spot prices lower and increasing intraday volatility.
Data from major exchanges showed a sharp spike in long liquidations, particularly in BTC and ETH perpetual futures, as prices broke below key support levels. Open interest dropped materially, confirming that the move was driven by position closures rather than fresh short selling. Funding rates flipped neutral to negative, signaling a rapid shift in trader positioning.
From a technical perspective, Bitcoin failed to reclaim its short-term moving averages, while Ether underperformed after losing its prior consolidation range. Momentum indicators remain weak, and volatility expansion suggests traders are positioning for further downside or sharp mean-reversion moves.
Liquidity conditions remain fragile. Order book depth has thinned, amplifying price moves during periods of heavy liquidation. Market makers have widened spreads, reflecting elevated risk and reduced confidence in short-term price stability.
Macro factors continue to act as a headwind. A higher-for-longer interest rate outlook has compressed risk appetite, while correlations between crypto and broader risk assets remain elevated. Traders are increasingly sensitive to macro data releases and central bank commentary, which are driving short-term positioning.
Looking ahead, traders are watching for signs of leverage normalization and stabilization in open interest. A sustained drop in liquidations, coupled with funding rates stabilizing and spot-led buying, would be early signals of a potential base formation. Until then, market conditions favor cautious positioning, tighter risk management, and reduced leverage.
In the near term, Bitcoin and Ether are likely to remain reactive to liquidation flows and macro-driven volatility, with traders prioritizing capital preservation over directional conviction.
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