The final two days noticed ETH Open Curiosity fall by practically $10 billion, whereas BTC shed over $5 billion.
Supply: CoinGlass
These drawdowns erased a number of weeks of gradual Futures accumulation.
Supply: CoinGlass
This abrupt drop is an indication of mass unwinding of leveraged positions, probably triggered by cascading liquidations and panic exits.
Supply: TradingView
In the meantime, the ETH/BTC ratio additionally broke decrease after a powerful July rally, slipping from 0.0325 to 0.0307.
Funding Charges flip and get better
On the first of August, Ethereum and Bitcoin Funding Charges on Binance briefly turned negative; an uncommon signal of heavy bearish stress, with ETH hitting -0.006% and BTC dipping to -0.003%.
This inversion indicated that quick sellers had been aggressively paying to maintain positions open, usually seen throughout lengthy squeeze cascades. Nonetheless, as of the 2nd of August, Funding Charges stabilized throughout exchanges.
Supply: Coinalyze
Aggregated BTC funding has recovered to +0.0042, and ETH has climbed again to +0.0063.
Supply: Coinalyze
This rebound means that bearish momentum could also be cooling, and a shift towards market rebalancing (or perhaps a quick squeeze) might be underway.
Liquidation zones gentle up the charts
Supply: CoinGlass
The BTC and ETH Liquidation Heatmaps present leveraged longs had been worn out en masse through the value slide.
Vivid yellow bands cluster round $117K for BTC and $3600 for ETH on the 2nd of August, exhibiting the place longs obtained trapped earlier than cascading liquidations accelerated the drawdown.
Supply: CoinGlass
With value motion now consolidating slightly below these ranges, they could act as resistance within the close to time period, not solely resulting from technicals, but additionally dealer psychology.
Nonetheless, the absence of heavy liquidation bands under present costs suggests the worst of the deleveraging could have handed.
That mentioned, upside restoration will probably face resistance close to beforehand liquidated zones, now turned psychological limitations.