Forecast Trend Report by Period
The cryptocurrency market’s weekend rebound appears to be a technical bounce during a deleveraging phase rather than the start of a broader trend reversal.
Crypto-focused media outlet BlockBeats reported on June 8 that on-chain analyst Axel Adler Jr. said the market had faced its strongest selling pressure of the month over the previous five days. Buying interest later partially recovered, but open interest in the derivatives market fell, indicating that fresh leverage has yet to return.
Net market order volume reached negative $236 million during that stretch, and Bitcoin briefly fell to $60,500, Adler said.
From June 7, aggressive buying started to recover somewhat. Short-term order flow swung back to the demand side, but the derivatives market has yet to confirm that move. Adler said futures open interest fell to $1.55 billion from a June 7 peak of $1.65 billion, a decline of about 6%.
By contrast, funding rates remained in positive territory over the past 24 hours, generally ranging from +0.001% to +0.020%.
A combination of rising prices, falling open interest and positive funding rates typically means the market is still deleveraging, Adler said. Existing positions are being unwound, while new leveraged long positions have yet to build in sufficient size.
He said the rebound was still meaningful because it was accompanied by real buy orders. But the continued decline in open interest shows that demand was not backed by an expansion in new positions.
“The rebound is real, but empty from a leverage perspective,” Adler said. He added that the move was closer to a deleveraging rally than a full trend reversal driven by fresh leveraged capital.
