Bitcoin Falls Sharply As Leveraged Positions Quickly Unwind
Bitcoin started the week under a lot of pressure, and during the early hours of trading in Asia, it fell below $93,000. The market lost momentum as derivatives-driven buying slowed down, which caused a lot of forced selling in the crypto markets. Analysts said the drop showed that the market structure was weak, even though selling pressure had eased since late last year.
Bitcoin fell by about 3 percent, bringing it down to $92,500 within hours of trading. CoinGlass data showed that positions worth more than $680 million were quickly closed. Most of the liquidations came from traders who were bullish and had crowded into leveraged long positions.
Derivatives Fueled Rally Leaves Market Vulnerable To Reversals
Data from the blockchain shows that Bitcoin’s recent rise to $96,000 relied heavily on leverage. Glassnode said that short liquidations and futures positioning, not real spot accumulation, were what moved prices. This mechanical demand tends to go away quickly when momentum stops.
The futures market is still not very liquid, which makes prices move more when forced buying pressure goes away. The analytics company said that shallow order books make it easier for sudden drops to happen. This structure makes Bitcoin vulnerable whenever leverage becomes too concentrated.
Long Term Holders Form Resistance Near Key Price Levels
Long-term holders who bought near cycle highs made a big supply zone, which Glassnode found. These holders have sold into rallies over and over again, which has made it hard for Bitcoin to keep going up. The same group of supplies stopped several attempts to recover in the last few months.
The 365-day moving average near $101,000 is still very important. This level has acted as a technical boundary between bull and bear phases. Holding below it makes institutional and long-term investors more cautious.
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CryptoQuant Warns Rally May Resemble Bear Market Bounce
In its weekly report, CryptoQuant gave a more cautious view of recent price changes. The company said that the rise since late November could be a bear market rally. These kinds of rallies often fade away without any real changes in demand.
Spot demand indicators are still weak, and demand seems to be shrinking in all major markets. U.S. spot Bitcoin ETF inflows have gotten a little better, but they are still low compared to the past. Analysts said these conditions do not show that a long-term trend has changed.
Altcoins Suffer Heavier Losses During Bitcoin Pullback
As Bitcoin fell, major altcoins declined by larger percentages during Asian trading sessions. Solana fell by more than 6 percent, and Sui and ZCash each lost about 10 percent. These moves were part of a broader effort to reduce risk as leverage quickly unwound.
Altcoins often amplify Bitcoin price swings because they have less liquidity and higher speculative exposure. The synchronized selloff showed how much the market relies on Bitcoin stability for confidence. As liquidation cascades accelerated across derivatives platforms, traders rapidly reduced exposure.
Signs Of Stabilization Emerge Despite Ongoing Uncertainty
Some signs point to a slowdown in selling pressure from long-term holders compared to late 2025. Glassnode observed lower distribution and increased spot buying on major exchanges. Recent Binance flows showed buyers becoming more active.
Coinbase-led selling activity has also slowed, providing limited support at current price levels. These changes suggest early stabilization rather than renewed bullish momentum. Analysts warned that recovery remains fragile without stronger spot demand.
Liquidity Sensitivity Keeps Bitcoin Exposed To Sharp Moves
Options markets show that uncertainty around Bitcoin’s near-term direction remains elevated. Glassnode said implied volatility is still relatively low despite sharp price moves in recent days. Longer-dated options contracts continue to price in downside protection.
Leverage will continue influencing short-term price behavior until spot accumulation normalizes. Analysts across multiple firms warned that liquidity shifts can trigger abrupt reversals. As Bitcoin trades in a leverage-sensitive environment, investors remain cautious.
