Foreign media reports that after Bitcoin's recent pullback, the market is simultaneously affected by panic and leveraged trading. The article argues that after the price broke below the support level around $73,000, on-chain losses increased, while aggressive long positions in the derivatives market have not cooled significantly, making the short-term trend more vulnerable.
On-chain loss tokens increase
The article mentions that Bitcoin has fallen by approximately 4.78% this week, briefly dipping to $72,000 during the session. Meanwhile, on-chain data shows that about 42% of the circulating supply is in a loss-making state, corresponding to over 8 million BTC.
The article argues that a significant portion of these losing positions are held by short-term investors. If prices continue to be under pressure, these positions are more likely to become a source of selling pressure, further amplifying market volatility.
The flow of funds to institutions has not yet been identified.
Typically, when the market enters a panic phase, some large funds will take advantage of the pullback to buy in, helping prices stabilize. However, this commentary points out that no such clear signal was seen this time.
According to Lookonchain, BlackRock moved approximately $157 million worth of BTC when Bitcoin experienced a near 5% drop in a single day. The article argues that the current panic is more akin to deleveraging and stop-loss orders than a renewed rise in risk appetite.
Highly leveraged long positions are still accumulating.
Looking at a longer timeframe, Bitcoin has still risen by nearly 8% this quarter, making its performance in the second quarter not particularly weak. However, the article points out that given the weakening on-chain data and the continued instability of the macroeconomic environment, the market may be overly optimistic about pricing in further gains.
The report, citing analysts, stated that a whale opened a long Bitcoin order worth approximately $30 million with 40x leverage, with a liquidation price around $72,400. This means that a slight further drop in price could trigger liquidation.
The article argues that what's more alarming right now isn't simply panic, but rather the fact that the derivatives market maintains high leverage even as panic intensifies. If long positions continue to accumulate while spot and on-chain data don't improve in tandem, Bitcoin could experience a sharper pullback in the short term.
