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Bitcoin’s futures market just experienced a seismic shift, with over $10 billion in Open Interest vanishing since January 2025. This decline followed a peak of $33 billion on January 17, when leverage hit record highs. A wave of market-wide liquidations, compounded by global economic uncertainty, triggered the sharp drop. Analysts believe this shakeout could pave the way for Bitcoin’s next big move, mirroring past market cycles before major rallies.
🚨 Bitcoin Bulls Eye Comeback After $10 Billion Liquidation Shakeout—Analyst.
— Blockviews (@blockviews) March 17, 2025
The Bitcoin rollercoaster ride just took a wild turn! 🎢 With a jaw-dropping $10 billion in open interest disappearing in just two months, our favorite cryptocurrency is gearing up for a reboot.… pic.twitter.com/U9IBs0Fm39
Bitcoin’s History Shows a Pattern
Bitcoin has witnessed similar leverage resets before. In March 2024, the cryptocurrency plunged from $69,000 to $59,700, wiping out over $1 billion in leveraged positions. That forced sell-off also reset Funding Rates, which helped Bitcoin regain momentum later that year. Many analysts view the current market correction as a necessary phase in Bitcoin’s long-term growth cycle.
Historically, when leverage builds up excessively, corrections follow. External factors, including geopolitical tensions and economic shifts, have only added to market volatility. Additionally, former U.S. President Donald Trump’s recent remarks on cryptocurrency have stirred market sentiment. His promise to end “Joe Biden’s war on Bitcoin” created speculation about potential policy shifts, influencing traders’ decisions.
Funding Rates Confirm Market Reset
Funding Rates, a key indicator of market sentiment, have shifted dramatically. From December 2024 to January 2025, persistently high Funding Rates indicated strong demand for long positions. However, by early February, these rates turned negative for the first time in months.
This shift coincided with Bitcoin’s peak at $101,440. By March 2, Funding Rates had dropped even further, signaling that traders were either closing leveraged positions or facing forced liquidations. A similar Funding Rate collapse occurred in March 2024, when excessive leverage was flushed out of the system. That event marked the end of an overheated market and set the stage for a strong recovery.
Also Read: Bitcoin Rises to $85K as BlackRock Predicts BTC Boom Amid Recession Fears
With history as a guide, major deleveraging events have often preceded Bitcoin’s most explosive rallies. If the pattern holds, Bitcoin could be gearing up for another upward surge, making this correction a potential buying opportunity for savvy investors.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
