Bitcoin Holds Near $77,700 as Derivatives Data Points to Leverage Flush, Not Trend Reversal

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Bitcoin briefly dipped below $77,000 before recovering to trade around $77,733 by midday Hong Kong time on Thursday, with derivatives metrics indicating the selloff reflected a clearing of leveraged positions rather than the beginning of a sustained downtrend, according to HashKey Group senior researcher Tim Sun.

Derivatives Positioning Showed No Buildup of Leveraged Longs Before the Drop

Open interest in Bitcoin futures held relatively steady during the selloff, and funding rates remained low or negative heading into the move, according to HashKey Research. Sun said in an interview that the absence of a prior accumulation of leveraged long positions shaped how the liquidation played out. 

“There was no massive accumulation of leveraged longs prior to this, meaning most of those liquidated in this drop were leveraged funds attempting short-term bottom-fishing,” he said. 

Sun added that this signals that we are not in the middle of a structural trend reversal downward, and that the temporary bottom of $75,000-$77,000 remains well-defined.

CoinGlass data showed $200 million in total crypto liquidations over the preceding 24 hours, split nearly evenly between long and short positions. Sun said that near-even split indicated a volatile, two-directional market rather than a one-sided capitulation event.

Rising U.S. Treasury Yields and Geopolitical Risks Weigh on Bitcoin

Sun identified macro conditions as the more consequential pressure on Bitcoin’s near-term outlook. The U.S. 30-year Treasury yield recently pushed above 5%, raising the opportunity cost of holding non-yielding assets such as Bitcoin and tightening broader financial conditions. 

Sun said investors are de-risking in response to rising long-term yields, with oil and inflation risks also keeping sentiment cautious. He added there is “currently no compelling reason for new capital to enter the market.”

$75,000-$77,000 Zone Identified as Key Near-Term Support Level

Bitcoin traded as low as $76,685 during U.S. hours before failing to reclaim the $78,000 level, according to CoinDesk price data. Sun described the $75,000 to $77,000 range as a well-defined support zone given the current derivatives setup. 

He said that if U.S.-Iran geopolitical tensions meaningfully de-escalate, cooler oil prices could ease inflation expectations and relieve pressure on yields, potentially creating room for a Bitcoin recovery.

Bitcoin May Stay Range-Bound If Yields Remain Elevated, Sun Says

Sun said that if long-term yields stay elevated and geopolitical risks persist, Bitcoin is likely to remain in a defensive, range-bound posture. He identified the $75,000 to $77,000 zone as the key near-term level to watch under that scenario. Bitcoin was little changed over the 24 hours prior to midday Hong Kong time, per CoinDesk data, trading at approximately $77,733.