The price of Bitcoin (BTC) has fallen 14.5% in the last 16 days, pushing the Crypto Fear & Greed Index to 16 (Extreme Fear), which is its lowest level since the beginning of the year.
Crypto Fear and Greed Index. Source: alternative.me
While selling has dominated markets over the past two weeks, Bitcoin derivatives data suggests traders’ current positioning could lead to a recovery. Analysts are now considering whether the recent selloff has set the stage for a recovery rally.
Key Takeaways and Market Analysis
Open interest on Binance has increased by more than 30% since its October 2025 lows, confirming increasing activity in the Bitcoin futures market.
A move towards $92,000 could see over $6.5 billion worth of short positions liquidated.
- Open interest on Binance has increased by more than 30% since its October 2025 lows, confirming increasing activity in the Bitcoin futures market.
- A move towards $92,000 could see over $6.5 billion worth of short positions liquidated.
Market Imbalance and Potential Recovery Rally
From a technical perspective, BTC has broken its swing lows between $80,000 and $83,000, overcoming a large group of long liquidations. As this downside liquidity is claimed, attention shifts upward.
Bitcoin three-day chart. Source: Cointelegraph/TradingView
Data from CoinGlass shows that a move towards $92,000 could bring the risk of liquidation in over $6.5 billion worth of cumulative short positions. In contrast, a drop to $72,600 would only threaten about $1.2 billion. This imbalance means that upward moves can force short sellers to buy back positions, potentially accelerating the price rally.
Bitcoin exchange liquidation map. Source: CoinGlass
Additionally, crypto commentator MartyParty described the recent move as part of a “spring” of Wyckoff accumulation, where price briefly falls below support to shake off weak hands before reversing.
Wyckoff Accumulation and Potential Price Increase
In this context, the drop below $83,000 could serve as a final liquidity raising that allows larger participants to purchase discounted Bitcoin. If sustained buying follows, the next phase could see a price increase with upside targets all the way back towards $100,000.
Bitcoin’s Wyckoff accumulation. Source: MartyParty/X
Bitcoin Futures Positioning and Market Activity
Bitcoin’s decline triggered an estimated $800 billion in liquidations in the last 24 hours, the largest single-day event since late November, when BTC last traded at around $81,000.
However, according to crypto analyst Darkfost, open interest on Binance has risen to 123,500 BTC, exceeding levels before October 10, when open interest fell to 93,600 BTC. An increase of around 31% since then suggests that traders are rebuilding their exposure rather than withdrawing from the market completely.
Open interest in Bitcoin term. Source: CryptoQuant
Broader derivatives activity has also cooled. Monthly Bitcoin futures volume across all exchanges fell to about $1.09 trillion in January, the lowest level since 2024. Trading remained concentrated on major venues, led by Binance with $378 billion, followed by OKX with $169 billion and Bybit with nearly $156 billion.
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