The crypto market decline has picked up momentum further due to $1.08 billion of liquidations in the last 24 hours, of which $919.54 million are longs. Meanwhile, the crypto futures market’s open interest (OI) has dropped by approximately 15% in the same period.
The significant liquidation of long positions suggests that many traders were overly bullish and heavily leveraged.
When the market moves against these positions, it triggers a cascade of liquidations, exacerbating the downward price movement. This scenario often leads to a rapid decline as stop-losses and margin calls are hit.
Meanwhile, the OI reduction signals a decrease in the number of active futures contracts, indicating that traders are closing their positions and stepping back from the market. Funding rates of most top coins, including Bitcoin and Solana, have dipped into negative territory simultaneously.
This suggests a bearish sentiment among futures traders, as they are willing to pay a premium to maintain their short positions. As shorts dominate the market, negative funding rates can lead to further downward pressure on prices.
