Bitcoin's Leverage Flush: Bottom or Bounce?

Bitcoin experienced a sharp sell-off, hitting an intraday low of $61,349, leading to approximately $1.76 billion in liquidations, with longs bearing the brunt at over $1.5 billion. The subsequent bounce to the mid-$63,000s suggests a potential short-term floor, but the deeply negative funding rates and reset open interest indicate that market deleveraging is still underway. The Crypto Fear & Greed Index plummeting to 12—extreme fear territory—reflects heightened bearish sentiment. While this flush has cleared excessive leverage, the absence of strong buying catalysts leaves the market vulnerable to further downside or consolidation. Traders should monitor for sustained recovery above $64,000 to confirm a bottom.

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