Bitcoin liquidity zone has been cleared! The surge in open contracts suggests that BTC may be迎 strong rebound.

After Bitcoin (BTC) fell from its historical high of $124,474, the market briefly plunged into panic. However, on-chain and derivation data indicate that although the liquidity zone was quickly swept over the weekend, the simultaneous surge in open contracts may be releasing a key signal - the revival of Bitcoin is brewing.

The pullback from historical highs triggers market volatility

After reaching a new high of $124,474, BTC experienced a profit-taking wave, with a short-term pullback of 6.72%, briefly falling below $115,000. Andre Dragosch, Head of Research at Bitwise Europe, pointed out that while profit-taking by short-term holders is increasing, the magnitude has narrowed compared to the past. However, the decline exceeded market expectations, with some analysts even predicting that BTC may test the support level of $110,000.

The weekend liquidity zone has been completely cleared.

Hyblock co-founder Shubh Varma stated that the BTC price trend in the past week has been significantly influenced by liquidity dynamics. During the weekend, as the price dipped, the market accumulated a large number of potential liquidation target areas, which were ultimately cleared out completely in a short period of time.

Varma added that this phenomenon of “liquidity grabbing” is particularly common on weekends, as the closure of Wall Street leads to weakened institutional demand, exacerbating the issue of order flow imbalance, decreasing liquidity depth, and sharply increasing slippage, which in turn triggers a chain of liquidations.

Supply and Demand Imbalance and Institutional Capital Rhythm

At the same time that liquidity was cleared, the market also saw large-scale redemptions of ETH, increasing the available supply. However, during the workweek, the demand for Digital Asset Trusts (DAT) remained strong, with several institutions announcing large purchases of BTC and ETH last week, driving prices up.

Varma pointed out that the lack of institutional funding over the weekend has caused the buying and selling depth of the order book to turn bearish, with 1% and 2% depths both declining, providing a short-term advantage to the bears.

The surge in open contracts releases a rebound signal

It is worth noting that when BTC dropped below $115,000 on Monday, the number of open contracts significantly increased at the same time. Varma believes this indicates that both bulls and bears are actively building positions in that area, while the bears are currently in a passive state.

The rise in open contracts is often seen as a signal of a recovery in market activity. If the price remains steady above $115,000, a technical rebound may be expected in the short term, potentially even challenging the $120,000 level again.

Conclusion

The recent price fluctuations of Bitcoin highlight the impact of weekend liquidity shortages and the rhythm of institutional funds. Although the liquidity area was quickly cleared, the rise in open contracts indicates that the market’s long and short forces are being rebalanced. Investors should closely monitor the $115,000 support level and changes in open contracts, as this may be a precursor to BTC’s recovery. For more real-time quotes and in-depth analysis, please follow the official Gate platform.