Bitcoin Price Shows No Signs of Leverage Cascade, Rebound Imminent?

Bitcoin price fell to $113,557.76 after dropping 1.43% within 24 hours. Even with the drop, signs of a deep market flush are currently missing.

Glassnode data showed no signs of a “leverage cascade,” implying the market is not completely overheated.

The current trend shows that spot-driven selling is leading the short-term momentum.

Spot Selling Behind Bitcoin Selloff, Not Leverage Shakeout

The numbers from futures trading did not show any panic from traders using borrowed capital.

It is worth noting that most of the trading activity came from direct selling on the spot market.

Data from Glassnode showed that open interest in Bitcoin futures dropped only slightly.

The open interest-to-market cap ratio stood at 0.027. This number stayed within the normal range.

It is important to add that liquidations were not very high. About $109.9 million worth of Bitcoin futures were liquidated, a figure considered low compared to larger market drops in the past.

Meanwhile, Ethereum, which dropped 6% to $3,631.82, saw more liquidations than Bitcoin, with $131.5 million closed in the last 24 hours.

Ethereum’s open interest was pegged at $33.5 billion, with a funding rate close to zero.

That means traders were not paying large fees to stay in long or short positions, which often happens during wild price swings.

The signs suggest that the fall in Bitcoin and Ethereum prices was not caused by forced selling in futures markets.

Rather, it came from people selling Bitcoin they already held.

Recent Buyers Were Main Sellers, Glassnode Shows

It is worth noting that market data also revealed the classification of traders doing the selling.

According to Glassnode, short-term holders made up most of the Bitcoin spending during the 24-hour period.

They sold $18.24 billion worth of BTC, making up 85.5% of the total volume. Long-term holders only sold $3.10 billion, accounting for just 14.5%.

A chart from Glassnode showed the biggest sales came close to midnight, with short-term holders making most of the moves.

These traders usually react fast to market changes as they tend to sell quickly when prices start falling.

Meanwhile, long-term holders, on the other hand, often stay put unless there is a much larger shift in price.

This kind of behavior shows that the dip may be due to panic or risk management from newer investors.

Rather than a breakdown in market structure. The futures market, based on the current data, stayed calm.

Big Companies Still Buying More Bitcoin

In a separate development, while the market dropped, two companies moved to buy more Bitcoin.

MicroStrategy filed a notice with the U.S. SEC to raise $4.2 billion by selling shares of its preferred stock.

The company said the money could be used to buy more Bitcoin, but gave no fixed date or amount.

Notably, just two days earlier, the same company announced it raised $2.5 billion. It used most of that $2.46 billion to buy 21,021 Bitcoin.

This brought its total Bitcoin holding to 628,791 units. The company spent $46.8 billion in total, with an average price of $73,227 per coin.

Similarly, Japanese investment company Metaplanet also made its move. It planned to raise $3.7 billion through a stock offering to support its Bitcoin plan.

According to the firm’s newly released statement, the goal is to gather 210,000 Bitcoin by 2027.

The firm recently bought 780 Bitcoin, bringing its total to 17,132. The holding is now worth about $1.73 billion.

Based on market observations, Bitcoin price drop looked like a normal round of spot selling. The futures market stayed steady, and there were no signs of panic.