The macro shock and elevated leverage in perpetual futures sparked cascading liquidations, pushing the price below the $107,000 threshold within 36 hours.
However, this was a much-needed cooling movement. Futures funding flipped negative during the pullback, showing that traders quickly reduced directional exposure while open interest fell as forced sellers exited positions.
Two seller groups drove the flow: dip buyers locking in substantial gains and previously underwater addresses exiting at breakeven.
Their combined activity created what the report described as an “overhead supply glut” that may stall price expansion without a corresponding uptick in inflows. Exchange data shows reduced incremental buying, while perpetual basis rates remain subdued after last week’s shakeout.
The analysis emphasizes that a period of sideways trading or mild retracement would reinforce market structure by flushing excess leverage and letting spot demand re-establish control.
Such consolidation has historically preceded fresh advances. Yet, the report cautioned that the depth of any pullback depends on macro events, including further clarity on the proposed tariffs and whether ETF allocations resume at a recent clip.
Amid the macro uncertainty and profit-taking risks, the report expects Bitcoin to oscillate between last week’s $106,000 intraday low and the $111,000 area until fresh spot demand absorbs overhead supply or a deeper reset draws buyers lower.
Seven weekly green candles illustrate persistent upward momentum, the longest streak since October 2023. However, the report noted that such moves often cool as leverage normalizes.
On-chain data corroborate the slowdown. The cost basis for short-term holders (STH Realized Price) climbed to $95,164, and selling accelerated once the market reclaimed that level.
Short-term holders booked $11.4 billion of profit over the past 30 days, compared with just $1.2 billion in the prior month. Realized profit peaked at $747 million a day, a level exceeded on only about 8% of trading sessions in Bitcoin’s history.
The report then warned that the STH Realized Profit/Loss Ratio surged to territory typically associated with late-stage rallies. In this stage, heavy distribution could cap the upside if new capital does not arrive to absorb it.
