Bitcoin Extends Selloff as Macro Pressures and Leverage Unwind

Bitcoin (BTC) continued its sharp descent throughout the week, breaching critical support levels as a confluence of macroeconomic anxieties and forced deleveraging drove prices toward multi-month lows. The cryptocurrency market is grappling with sustained sell pressure emanating largely from a global shift toward risk-off sentiment.

The primary catalyst remains the increasingly hawkish stance from global central banks, particularly the U.S. Federal Reserve. As interest rates rise and quantitative tightening measures persist, investors are actively rotating capital out of high-beta, speculative assets like cryptocurrencies and into safer havens. This heightened correlation with traditional indices, particularly tech stocks, underscores Bitcoin’s current vulnerability to systemic financial stress.

Adding significant pressure to the downside is a substantial unwind of leverage across derivatives markets. Data indicates that the rapid price decline triggered hundreds of millions in liquidations of long positions across major exchanges. This cascade effect forces further selling, transforming moderate price drops into steep selloffs as over-leveraged traders are forcibly closed out, resetting market positioning and flushing out speculative positions.

Analysts note that until macroeconomic stability returns and the excessive leverage (high Open Interest) in perpetual futures normalizes, volatility is expected to remain high. The market is currently focused on whether foundational support levels can hold to prevent a deeper retracement, suggesting that the current weakness is more structural (macro-driven) than ephemeral.

Source: Bitcoin Extends Selloff as Macro Pressures and Leverage Unwind