$BTC Leverage Unwind Fuels Volatility (Mixed Signal)

The Big Picture:

As prices dipped below $115,000, over $116.3 million in long positions were liquidated—the largest single-day long squeeze since August 7 (CoinTelegraph). The rapid unwinding amplified downward pressure in the short term.

However, open interest across futures markets rose 0.41% to $93.8 billion, indicating new short positions are being established amid the dip.

Why It Matters:

While excessive leverage can accelerate downturns, rising open interest suggests fresh bearish bets. This sets the stage for a potential short squeeze should positive catalysts—like dovish Fed remarks—trigger a sharp rebound.

Think of it as a coiled spring: the tighter the bearish positioning, the more explosive the upside if momentum reverses.