BEARISH 📉 : Bitcoin market faces incomplete deleveraging with persistent long demand

Bitcoin experienced a significant drop to $81,119 on January 30. This was accompanied by a spike in forced long closures, while perpetual funding rates remained positive.

Key Insights

The market saw a "cascade of forced closures" with long liquidations dominating at approximately 97%, indicating sustained deleveraging pressure over the last month.
Analyst Axel Adler Jr. noted that although liquidation extremes can lead to short-term stabilization, it is not a reversal signal without further confirmations.
The current condition for ending the deleveraging cycle is a decrease in liquidation imbalance rather than a peak.
Despite price declines and liquidation cascades, funding rates stayed positive at 43.2% annualized, suggesting a market still inclined towards long positions.
This positivity in funding indicates the risk of repeated deleveraging if longs are quickly rebuilding or bullish leverage hasn't fully unwound.
The combination of intense liquidations and positive funding suggests incomplete deleveraging, with a continued demand for long exposure.

Adler's analysis points to an "incomplete deleveraging" scenario, where the market may face further volatility if long positions persist through downturns.

Currently, BTC is trading at $82,968.