Bitcoin's Price Decline Attributed to Contraction of Futures Positions

A recent analysis suggests that the recent decline in Bitcoin's price is not just a correction, but a breakdown of a bearish trend. According to data from CryptoQuant, the contraction of futures positions has played a significant role in this decline.

The TradingView price chart and Open Interest charts show a similar structure over recent days, indicating that the growth in Open Interest is reflective of rising leverage rather than solid spot demand. This implies that the previous advance was sustained by a fragile structure, dependent on leverage.

As a result, the market is now exposed to a bearish or corrective phase, with a probable retracement toward the initial impulse area. The break of the uptrend invalidates the previous bullish structure, making it less likely for a rebound to be sustainable without solid spot demand.