Crypto markets saw a notable downturn on Thursday, with signs pointing toward a long squeeze — not fresh bearish sentiment — as the catalyst behind the move.
The prices of leading digital assets including Bitcoin (BTC)$BTC
, Ethereum (ETH), XRP$XRP
, and Solana (SOL)$SOL
slipped notably, triggered by the unwinding of leveraged long positions. The 20 Index (CD20), which tracks the 20 most liquid tokens, tumbled 6.8% over the past 24 hours.
Bitcoin (BTC) briefly topped $120,000 earlier in the week, but failed to hold gains and currently trades at $118,657.76, down nearly 1%. Ethereum dropped by 3%, XRP saw a sharp 13% decline to $3.0894, and SOL retreated as well.
The latest data reveals a clear decline in futures open interest across major platforms including Binance, OKX, and Bybit:
SOL open interest: -5%
BTC open interest: -1.5%
ETH open interest: -2%
Despite the drop in prices, funding rates remain positive, signaling that bullish sentiment hasn’t completely vanished — but many traders are closing out long positions either voluntarily or via liquidations.
A long squeeze occurs when traders holding leveraged long positions are forced to sell as prices fall, pushing prices even lower. It’s typically viewed as a healthy market correction that clears excessive bullish leverage.
Importantly, the decline in open interest suggests traders are exiting the market, rather than opening new short positions — a distinction that signals the drop is driven more by position liquidation than active bearish bets.
In summary, the selloff doesn’t reflect a shift to bearish market sentiment, but rather a market cleanup of overleveraged long trades — a necessary reset that could pave the way for a healthier rebound#CryptoClarityAct #CryptoScamSurge #TrumpBitcoinEmpire #BNBBreaksATH #BTCvsETH