BlockBeats News, January 30, Cryptocurrency market analyst Axel Adler Jr. stated that the “Bitcoin Futures Long vs. Short Liquidation Dominance” data has hit 97%, with the 30-day moving average rising to 31.4%. This means that almost all forced liquidations have come from long positions, and buyers have been under systemic pressure for the past month.
Extreme oscillation indicator values usually coincide with peaks of forced selling and may bring about short-term stabilization. However, without other confirming signals, this is not an indication of a trend reversal. To form a sustainable “local bottom,” at least a return of the oscillation indicator to zero or a decrease below the 30-day moving average is needed.
Axel further noted that despite the price crash and cascading liquidations, BTC’s funding rate remains positive: yesterday’s reading was at an annualized 43.2%. Although significantly lower than the peaks of October and November (100%+), this indicates that the market’s demand for long exposure still dominates. Over the past month, negative values have only briefly and sporadically appeared.
With the funding rate remaining positive in large-scale liquidations, the risk of the market deleveraging again is increased: this means that the market is quickly rebuilding long positions or is not yet prepared to fully unwind. A complete “derivative surrender” usually accompanies a shift in the funding rate to neutral or negative territory — which has not yet occurred.
Two charts together paint a picture of deleveraging that may not have been completed: liquidations have devastated longs, but the overall position structure still leans bullish.
