Bitcoin futures open interest on Binance fell alongside BTC price as analysis published on CryptoQuant flagged mounting pressure on leveraged longs.
Bitcoin (BTC) long positions are “facing liquidation” as volatility shows signs that a range breakout is finally coming.
Insights published on onchain analytics platform CryptoQuant by community analyst “BorisD on Thursday said that leveraged long BTC positions are being flushed out as BTC/USD targets month-to-date lows.
BTC/USD one-hour chart. Source: Cointelegraph/TradingView
The analysis focuses on the relationship between price and open interest (OI) on Binance. OI represents total active derivative positions, both long and short, and reflects capital commitment in a given market.
While price has traded in a narrow range since June, CryptoQuant data show that Binance OI has gradually increased, reaching $8.15 billion on Wednesday as futures increasingly steer the market while spot traders sit on the sidelines.
Bitcoin open interest on Binance. Source: CryptoQuant
With price now seeing downside volatility on lower time frames, the correlation between price and OI has entered a state of flux, potentially squeezing long positions that have built up in the low $60,000 zone.
“In the Bitcoin market, the Binance Open Interest (OI) Correlation and liquidation warning signals clearly reveal the process of leveraged positions being flushed out. Initially, as the price fell, the correlation shifted to the negative side, indicating that OI was rising despite declining prices,” the analyst wrote.
BTC/USD vs. Binance OI data. Source: CryptoQuant
The latest correlation data showed a reading of 0.25, a number that the analyst said reflects declining long positions as price continues to fall, suggesting the “anticipated cleanout has begun.”
“The simultaneous drop in both price and OI indicates that leveraged long positions are giving up, getting stopped out, or facing liquidation,” the analyst continued.
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