Crypto analytics firm Matrixport has announced that the cryptocurrency market has entered a distinct deleveraging phase, with the risks of maintaining highly leveraged positions rapidly increasing.
The company noted that the recent 50% drop in open interest in Ethereum futures indicates that leveraged funds are beginning to unwind significantly. This suggests a weakening of overall risk appetite and increasing selling pressure in the market.
Bitcoin's Critical Support Level and ETF Influence
According to Matrixport, Bitcoin is currently approaching the critical $93,000 level. The company emphasized that liquidity in this price range could become more fragile in the short term, and volatility could increase.
The large-scale liquidation of long futures positions, which had accumulated rapidly, particularly in the fourth quarter, helped alleviate some of the short-term pressure in the market.
However, Matrixport notes that the key element the market will need to monitor from now on will be ETF positions.
If the general market trend remains weak, spot Bitcoin ETFs may also be pressured to reduce their positions, which could create a new liquidity shortage in the market.
Investor Caution Advised
While the company considers the current situation to be an important threshold for the crypto market, it emphasizes that investors should be more cautious about leverage risks.