Derivatives indicate that the market's bearish sentiment may be saturated, indicating a possible rebound.
By Krisztian Sandor, Oliver Knight|Edited by Stephen AlpherUpdated Jun 25, 2026, 3:04 p.m. Published Jun 25, 2026, 3:03 p.m. 2 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Bitcoin (BTC) price on June 25 (CoinDesk)SummaryShow- Bitcoin saw a sharp drop of 5% to $58,000 during early U.S. trading on Thursday, marking its lowest point since 2024.
- Data from derivatives and order books indicate that there is a significant amount of short positions, along with stronger buying interest below the current market price, hinting at a possible short squeeze.
Bitcoin BTC$59,516.33 opened the U.S. trading session on Thursday with a swift decline of 5%, reaching $58,000, its lowest price since 2024.
The leading cryptocurrency has since recovered slightly to $59,400, reflecting a 2.5% decline over the past day. This downward trend affected the wider cryptocurrency market, with Ether (ETH) falling to approximately $1,550, down 5.5%, while solana (SOL) and DOGE$0.07327 experienced similar losses.
This movement occurred as memory chip manufacturer Micron (MU) surged after reporting strong earnings on Wednesday evening, while much of the larger tech sector declined, resulting in a 0.4% drop in the Nasdaq index.
Markets are currently processing the financial implications of the AI surge, alongside the Federal Reserve's unexpectedly aggressive stance last week under new Chair Kevin Warsh.
Officials indicated that a rate hike is more likely than a cut, and this increase may occur sooner than previously anticipated by the markets.
Short-Squeeze Potential
Despite Bitcoin's ongoing downtrend that began in October, data from derivatives suggests a potential for short-term recovery.
The liquidation heatmap indicates that there is a significant amount of liquidation risk concentrated above current prices, which implies that further declines may not trigger a wave of forced selling; rather, the real risk lies with those holding short positions.
Open interest has increased by approximately 0.28% in the last 24 hours, even as the price dropped around 3%, suggesting that traders are not closing their short positions but are instead increasing their bets on a break below the $58,000 support level. Additionally, negative funding rates indicate that the market is paying a premium for downside exposure.
Spot market depth supports the notion of underlying strength; CoinGlass data reveals that there are 6,900 BTC ($409 million) in buy orders between the current price and $50,000, compared to just 1,570 BTC ($93 million) in sell orders between the current price and $70,000, creating a bullish imbalance in supply.
In scenarios like this, when a trade becomes overcrowded, savvy traders and market makers often exploit this weakness, potentially reversing the price trend. This could compel those with short positions to close out to avoid incurring funding costs and liquidation risks.
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CEX Volumes Drop to Lowest Since September 2024 as RWA Perps Hit Record High
CEX Volumes Drop to Lowest Since September 2024 as RWA Perps Hit Record High
In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
By CoinDesk ResearchJun 15, 2026In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
Why it matters:
In May, combined exchange volumes fell 3.45% to $4.41T; the lowest since September 2024. RWA perpetual futures volumes rose 10.4% against the trend, hitting a new all-time high.
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