BitcoinMarkets
|3 min ReadBitcoin drops as shorts pile in while spot buyers step up
Jax Morales
Senior Analyst
Published
Jan 16, 2026
Derivatives drove the drop
Bitcoin fell fast on Thursday. A short-selling cascade pushed price down 3.5 percent to 1 billion in bearish bets piled on. The move triggered $724 million in liquidations in 24 hours. Longs took 74 percent of the hit. Bulls were caught leaning.
The slide started earlier. In the 90 minutes before the big break, Bitcoin slipped 1.5 percent from 591 million in notional exposure, according to Velo: https://velo.xyz/snapshot/80be900b. Perpetual futures CVD on offshore venues like Binance and Bybit turned lower. Spot CVD stayed steady. Shorts pressed. Price followed.
Then the pressure built. Over the next two hours, open interest climbed another 4 percent, adding 107,500. “Short traders are dominating in the perpetual futures markets right now, and spot demand is still in contraction based on on-chain data,” said Julio Moreno, head of research at CryptoQuant.
Spot buyers fought back
Amid the chaos, a split appeared. Spot CVD on Coinbase stayed mostly positive. Dip buyers showed up. The spot bid-ask delta indicator flashed stronger bids, suggesting spot flows were absorbing the fire from leveraged shorts, per CoinGlass (via Velo: https://velo.xyz/snapshot/80be900b).
Other coverage noted the same shock. Bitcoin’s Dip Below 524M in Crypto Liquidations. After the flush, Bitcoin rebounded to 4,000. XRP dropped 4 percent to roughly $2.40.
After the flush, a fragile reset
Analysts framed the move as mechanical, not existential. Bitcoin's $19 Billion Leverage Wipeout Leaves Market in Reset Mode. “It was a structural flaw magnified by excessive leverage and thin liquidity,” said Thiago Duarte, market analyst at Axi. ETF demand cooled last Friday. Speculation got rinsed. The market waits.
Macro still looms. “The drop is due to a mix of macroeconomic uncertainty, rising geopolitical tensions, and a spike in liquidations from overleveraged positions,” said Ryan Lee, chief analyst at Bitget. The bounce met profit-taking, which added fresh selling, Lee noted.
Patience is the call. The market needs time to rebalance after a big flush, said Anthony Leutenegger, CEO of Aragon. Volatility likely lingers while macro stays cloudy. Moreno remains cautious despite dip-buying on spot. He sees the odds of a rally tilted to the downside.
Shorts controlled the pace. Spot buyers showed backbone. The tug-of-war is back. Tremendous test of conviction.
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