Bitcoin Demand For Leveraged Longs Fading

Bitcoin has faced volatility and selling pressure since the start of February, dragging down altcoins and meme coins as bearish price action takes over the market.

Bitcoin’s price action has faced volatility and selling pressure since the start of February, dragging down altcoins and meme coins as bearish price action takes over the market.

After hitting a new all-time high of $97,857 on Feb. 2, BTC faced strong selling pressure at key supply zones, leading to a downturn in the price. The market structure has shifted, and bulls are showing signs of exhaustion, prompting analysts to call for a broader correction.

Bitcoin price faces selling pressure at key supply zones. Source: Material Indicators

According to data from Material Indicators, the 7-day average funding rate has been in a steady decline since late January, now sitting at 0.004% — a staggering 85% drop from its December peak of 0.026%.

This sharp decrease in funding rates signals that demand for leveraged long positions is fading, and speculative appetite in the market is weakening. Without renewed leverage from traders, Bitcoin’s price action is likely to remain choppy or even turn more corrective in the coming weeks.

The 7-day average funding rate has seen a steep decline. Source: Glassnode

As highlighted by Material Indicators, the key levels to watch for support are the $96,000 and $89,000 price points, which could provide an opportunity for the market to stabilize and prepare for the next leg higher.

However, if Bitcoin fails to find support at these levels, a broader market correction could unfold, leading to further declines in the cryptocurrency market.