Bitcoin (BTC) has decreased by 14.5% over the past 16 days, pushing the Crypto Fear & Greed Index down to 16 points (Extreme Fear) — the lowest level since the beginning of the year.
Crypto Fear & Greed Index | Source: alternative.me Although selling pressure has dominated over the past two weeks, derivatives market data suggests that trader positioning could set the stage for a rebound. Analysts are currently assessing whether the recent sell-off has been sufficient to create conditions for a “relief rally” or not.
Market imbalance opens opportunities for a slight recovery
Technically, BTC has swept through the oscillation bottom zone of $80,000–$83,000, triggering and absorbing a large cluster of long liquidation. As the liquidity source below has been significantly “withdrawn,” the market’s focus tends to shift to higher levels.
Bitcoin 3-day chart | Source: Cointelegraph/TradingView According to CoinGlass, if the price moves toward $92,000, over $6.5 billion in accumulated short positions could face liquidation risk. Meanwhile, a scenario dropping to $72,600 only puts about $1.2 billion at risk. This disparity indicates that bullish momentum could be amplified: as the price rises, short sellers are forced to buy back, creating a “short squeeze” effect and accelerating the recovery.
Bitcoin liquidation map | Source: CoinGlass To support this point, commentator MartyParty sees recent developments similar to the Wyckoff Accumulation “Spring” pattern — where the price temporarily breaks through support to shake out weak-handed investors before reversing.
In this context, a sweep below $83,000 could be seen as a final “liquidity grab,” opening opportunities for large players to accumulate at attractive levels. If buying pressure remains strong enough, the next phase could be an expansion, with targets returning to near $100,000.
Bitcoin futures positioning: Contradictory signals
Bitcoin’s decline is believed to have triggered around $800 billion in liquidations over the past 24 hours — the largest in a single day since late November, when BTC traded around $81,000.
However, according to analyst Darkfost, open interest on Binance has increased to 123,500 BTC, significantly higher than before October 10 (when open interest dropped to 93,600 BTC). The roughly 31% increase since then suggests that many traders are re-establishing their market participation rather than completely withdrawing.
Open interest (Bitcoin) volume | Source: CryptoQuant Looking at the broader picture, derivatives activity has cooled down. The monthly trading volume of Bitcoin futures across all exchanges reached approximately $1.09 trillion in January — the lowest since 2024. Liquidity remains mainly concentrated on major exchanges, led by Binance with $378 billion, followed by OKX ($169 billion) and Bybit (around $156 billion).
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