Bitcoin Drops as More Traders Bet on Price Falling, Despite Increased Buying

Bitcoin Drops Sharply After Heavy Short Selling

Bitcoin fell sharply on Thursday as a wave of short selling triggered deeper losses.

In just 90 minutes, Bitcoin dropped 1.5% from around $115,000, while open interest — the total number of active derivative contracts — rose 2.3%, adding about $591 million in new positions, according to data from Velo.

Trading data showed that futures traders on offshore exchanges like Binance and Bybit were mostly selling short, pushing prices lower. Spot (direct) market activity stayed flat during this time.

Over the next two hours, short selling increased even more, sending Bitcoin down 3.5% to $107,500 as regular spot sellers also began selling. Open interest jumped again by 4%, adding another $1.03 billion in exposure.

“Short traders are dominating in the perpetual futures markets right now, while spot demand is still shrinking,” said Julio Moreno, Head of Research at CryptoQuant.

However, data from U.S.-based exchange Coinbase showed something different. Spot investors there continued buying the dip, helping absorb the selling pressure from leveraged shorts, according to CoinGlass data.

The steep move caused $724 million in liquidations over 24 hours, with $536 million of those losses coming from long (buy) positions. Many traders who expected a rebound were caught off guard.

“The drop happened due to macroeconomic uncertainty, rising geopolitical tensions, and liquidations from overleveraged positions,” explained Ryan Lee, Chief Analyst at Bitget.

Lee added that after the recent recovery, some investors took profits, adding more selling pressure.

Looking ahead, Anthony Leutenegger, CEO of Aragon, said the market will likely need time to stabilize after such a sharp decline.

“As long as global uncertainty continues, we can expect more volatility,” he said.

Despite some dip-buying activity, Moreno remains cautious, saying the chances of a rally remain low in the near term.