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Bitcoin shorts above $70K at risk since ‘90% of downside’ is already complete
TL;DR
Traders who opened Bitcoin short positions above $70,000 may face liquidation risks as leveraged positions were closed. Analysts suggest that nearly 90% of the downside has already been priced in, with Bitcoin futures open interest declining significantly.
Key points
- Traders with shorts above $70K may face liquidation risks
- 90% of Bitcoin's downside has been priced in
- Bitcoin futures open interest fell by 2.46%
- Total open interest is near 318,000 BTC
- Peak open interest change was 8.9% on March 31
Bitcoin (BTC) futures data shows that traders who opened new short positions above $70,000 over the weekend could be at risk of liquidation as a wave of leveraged positions were closed on Monday.
The weekly change in Bitcoin futures market open interest fell to -2.46% on Monday, down from an 8.9% increase on March 31, suggesting a decline in leverage.
Multiple long-term Bitcoin valuation metrics also sit at historic lows, with analysts estimating that nearly 90% of the downside has already been priced in.
Bitcoin futures leverage reset meets rising short bias
Bitcoin researcher Axel Adler Jr noted the weekly change in aggregate Bitcoin futures open interest (OI) measured in BTC. The metric peaked at 8.9% on March 31 as the price pushed above $73,000. By April 4, it flipped to -7.2%, marking the sharpest contraction in the period. The seven-day change stands at -2.46% on Monday, with the total OI near 318,000 BTC.
Bitcoin futures open interest. Source: Axel Adler Jr.
The shift into negative territory occurred on Sunday, placing the deleveraging phase in its early stage. Adler said that the price holding above $70,000 during this contraction shows that a large portion of long-side leverage has been closed without a cascading liquidation that crashed the BTC price.
OI does not distinguish between voluntary closures and forced liquidations, so the move is described as a broad leverage reset.
Funding rate data adds a second layer. The seven-day average funding rate across Binance, Bybit and OKX has dropped from 0.33% on March 31 to -0.1738% by April 13.
Bybit and OKX show deeper negative values, signaling a stronger short-side tilt. The negative funding means sellers are paying buyers to hold positions.
Q&A
What risks do Bitcoin traders face with shorts above $70K?
Traders with short positions above $70,000 may be at risk of liquidation due to a wave of leveraged positions being closed.
How much of the downside in Bitcoin has been priced in?
Analysts estimate that nearly 90% of the downside in Bitcoin has already been priced in.
What is the current state of Bitcoin futures open interest?
The Bitcoin futures open interest has declined by 2.46%, with total open interest near 318,000 BTC.
What was the peak change in Bitcoin futures open interest recently?
The peak change in Bitcoin futures open interest was an increase of 8.9% on March 31, which has since flipped to a decline.
