According to WooFunai, the Bitcoin derivatives market is sending a red flag, and CryptoQuant analyst Axel Adler Jr. warns that traders are about to face a shorting situation. This divergence between a reduction in open positions and an increase in financing rates has historically often indicated that leveraged bulls will be forced to liquidate.
Changes at the data level reveal the beginning of the deleveraging phase. On August 31 (local time), the BTC open position contract was 331,000 bitcoins, and by August 21, this value had dropped by about 3.8% to 318,000 bitcoins.
According to data compiled by WooFunai, a total of 2,850 Bitcoin positions have been liquidated in the past 24 hours. This process marks that the market has entered the deleveraging stage after experiencing potential emptiness, and there are obvious signs of capital outflow.
The risk is further exacerbated by distortions in the rate structure. The current financing rate is 0.00906%, of which the 8-hour average is 0.00821%, which is approximately 13% higher than the 24-hour average of 0.00725%. This significant rise in the short-term average indicates from a structural point of view that long positions are concentrated on a short-term surge, and leverage costs are rapidly accumulating, paving the way for potential price reversals.
If the BTC price falls below the key support level, it will trigger a chain reaction and cause the bulls to be forced to liquidate, which in turn will trigger an even more intense shortening of the market. As the volatility of the cryptocurrency market continues to rise and BTC is struggling to maintain recent highs, retail investors and institutional investors need to be wary. Macroeconomic news and changes in regulatory policies also affect the situation. Once the excessively long derivatives market pulls back, the magnitude may exceed expectations.