today’s crypto selloff looks more like a leverage reset than fresh spot capitulation
more than $500M in leveraged positions were wiped out across the market, with longs taking most of the damage
and the derivatives side is still doing a lot more work than spot
on-chain perp volume is around $23.5B right now, versus roughly $7.2B across DEX spot
$ETH is probably the clearest example
price fell hard while open interest dropped, meaning positions were actually being closed rather than traders simply piling into new shorts
$BTC looks a little different: OI has stayed roughly flat to slightly higher, so positioning there hasn’t reset as cleanly
that changes how I trade this
I’m not chasing the first green candle as a new trend
A bounce after this kind of flush can just be shorts closing
but I’m not excited about chasing fresh shorts after hundreds of millions in longs were already forced out either
what I want next:
price stabilization + OI staying flat/down + actual spot buying
before treating a bounce as something more than a liquidity reset
right now:
leverage got cleaned out
spot still needs to prove it wants back in
more than $500M in leveraged positions were wiped out across the market, with longs taking most of the damage
and the derivatives side is still doing a lot more work than spot
on-chain perp volume is around $23.5B right now, versus roughly $7.2B across DEX spot
$ETH is probably the clearest example
price fell hard while open interest dropped, meaning positions were actually being closed rather than traders simply piling into new shorts
$BTC looks a little different: OI has stayed roughly flat to slightly higher, so positioning there hasn’t reset as cleanly
that changes how I trade this
I’m not chasing the first green candle as a new trend
A bounce after this kind of flush can just be shorts closing
but I’m not excited about chasing fresh shorts after hundreds of millions in longs were already forced out either
what I want next:
price stabilization + OI staying flat/down + actual spot buying
before treating a bounce as something more than a liquidity reset
right now:
leverage got cleaned out
spot still needs to prove it wants back in
