Derivatives deleveraging signals sentiment reset near $70K
Bitcoin Funding Rates expanded alongside price recoveries, reflecting growing long dominance as sentiment strengthened.
As the price advanced toward $100,000 in 2025, funding spiked between 0.05% and 0.08%, signaling euphoric leverage expansion.
Thereafter, rates gradually compressed while prices consolidated, indicating cooling momentum and reduced speculative excess.
Source: CryptoQuant
Into early 2026, funding trended lower and periodically flipped negative as the price retraced toward $60,000. This shift reflected short overcrowding, as bearish traders paid premiums to maintain exposure.
Meanwhile, Open Interest peaked near $45 billion during the rally, then declined sharply toward $22 billion, confirming large-scale leverage destruction.
Source: CryptoQuant
As positions unwound, forced covering fueled reflexive rebounds, lifting Bitcoin back near $73,000. Funding then stabilized near neutral, implying sentiment normalization.
This compression signaled a leverage reset, which historically supported stabilization when spot demand sustained recovery momentum.
Final Thoughts
- Bitcoin’s position below $73,000 ultimately reflected stressed sentiment and investor losses, yet history showed that reclaiming this level often marked the transition into recovery phases.
- At the same time, liquidation waves and leverage resets revealed positioning had already flushed, leaving the market structurally healthier and primed for a rebound if demand returned.