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Bitcoin’s price faced another turbulent trading session on Thursday, tumbling 3.5% to around $107,500 as a wave of short selling swept through the derivatives market. The move added more than $1 billion in bearish bets, triggering widespread liquidations and deepening the week’s volatility.
According to data from Velo, the sharp downturn began with a 1.5% dip from $115,000, accompanied by a 2.3% rise in open interest — a sign that traders were aggressively opening new short positions. The increase added approximately $591 million in notional exposure, suggesting that leveraged traders were betting on further declines.
Short Sellers Drive the Downtrend
Analysts note that Bitcoin’s decline was largely driven by short perpetual futures on offshore exchanges such as Binance and Bybit. The cumulative volume delta (CVD) for perpetual futures fell sharply, while spot CVD remained steady, indicating that derivatives traders were leading the sell-off.
As selling pressure intensified, Bitcoin dropped another 3.5%, reaching $107,500, while open interest surged by an additional 4%, adding more than $1 billion in leveraged exposure. This heavy concentration of short positions amplified volatility and increased liquidation risk across the market.
“Short traders are dominating in the perpetual futures markets right now, and spot demand is still in contraction based on on-chain data,” said Julio Moreno, Head of Research at CryptoQuant.
Spot Buyers Step In — But Support Remains Fragile
Despite the aggressive short activity, spot buyers on Coinbase continued to accumulate Bitcoin, signaling renewed “buy-the-dip” sentiment. Data from CoinGlass showed a stronger bid-ask delta, suggesting that U.S.-based investors were absorbing some of the selling pressure.
However, the support remains fragile. Analysts caution that spot buying alone may not offset the intensity of leveraged short positions, particularly given recent macroeconomic and liquidity concerns.
The market turbulence triggered nearly $724 million in liquidations over the past 24 hours, with long positions accounting for 74% of the total — roughly $536 million. This suggests that many traders attempted to buy into the dip too early, only to be liquidated as the price continued lower.
Broader Crypto Market Mirrors Bitcoin’s Weakness
The downturn in Bitcoin also dragged the broader crypto market into the red. According to CoinGecko data, Bitcoin briefly fell below $110,000, pulling major altcoins down alongside it.
Ethereum (ETH) slipped 1.8% to around $4,000, while XRP declined by 4% to $2.40. Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) recorded similar losses ranging from 0.9% to 5.3%.
Analysts attribute this synchronized decline to the high degree of correlation between Bitcoin and the rest of the crypto market, especially during high-leverage liquidation events.
Analysts Weigh In on Market Outlook
Market strategists say the latest pullback highlights the ongoing structural fragility in Bitcoin’s derivatives landscape. Excessive leverage, thin liquidity, and uncertain macroeconomic conditions have made the market highly sensitive to abrupt position shifts.
“It was a structural flaw magnified by excessive leverage and thin liquidity,” said Thiago Duarte, Market Analyst at Axi. He added that following last week’s $19 billion leverage wipeout, the market remains in a “reset mode,” waiting for new liquidity inflows.
Similarly, Ryan Lee, Chief Analyst at Bitget, pointed to a mix of “macroeconomic uncertainty, geopolitical tensions, and cascading liquidations” as the key drivers behind the price correction.
Anthony Leutenegger, CEO of Aragon, noted that the market needs time to stabilize:
“After such a big flush-out, the crypto market will likely need time to rebalance. As long as macro uncertainty lingers, we might expect continued volatility.”
Short-Term Outlook: Continued Volatility Ahead
Despite the presence of dip-buying from spot investors, sentiment remains cautious. Moreno from CryptoQuant warned that bearish momentum could persist in the near term, especially if open interest continues to climb while funding rates stay negative.
“The odds of a rally are still tilted to the downside,” Moreno said, noting that Bitcoin’s current market structure favors short-term traders over long-term holders.
With volatility on the rise and leveraged positions still elevated, analysts expect Bitcoin price volatility to remain high through the coming weeks. Whether spot accumulation can offset the dominance of short sellers may determine the next major directional move.
