Bitcoin Open Interest Halves After $500 Million in Liquidations, Signaling Further Downside Risk

▲ Bitcoin (BTC), decline / ChatGPT-generated image

The cryptocurrency market has been gripped by unprecedented fear after U.S. President Donald Trump defied a Supreme Court ruling and announced new global tariffs. In the aftermath, Bitcoin (BTC) fell below $65,000.

According to a February 23 report by crypto media outlet CryptoPotato, Bitcoin’s price plunged within hours from $67,800 to a 17-day low of $64,350. The sharp decline came immediately after President Trump declared that he would impose a temporary 15% global tariff by invoking an unprecedented legal provision known as “Section 122,” replacing previously imposed tariffs that had been ruled unlawful by the Supreme Court. Bitcoin had maintained a calm trajectory over the weekend, but as soon as regular futures markets opened on Sunday afternoon, it succumbed to intense selling pressure.

Market analyst Ali Martinez warned of further downside scenarios based on the average purchase price of Bitcoin holders and identified key support levels. Martinez stated that if Bitcoin fails to halt its current downtrend, it could retreat to $58,500 and $54,440, and in the worst-case scenario, drop to as low as $41,500. Although Bitcoin has found support near $64,350 and is striving to reclaim the $66,000 level, overall market anxiety remains unresolved.

Indicators in the futures market have also deteriorated sharply, confirming investors’ panic selling. On-chain analytics platform Santiment reported that approximately $500 million worth of futures positions were liquidated during the crash, with more than 90% of them being long positions betting on price increases. Consequently, Bitcoin’s open interest shrank to $19.5 billion—about half of its yearly peak of $38.3 billion recorded on January 14—signaling a rapid drying up of market liquidity.

The altcoin market likewise failed to escape the impact of Bitcoin’s plunge, with most tokens falling more than 5% in tandem. However, Santiment noted that fear, uncertainty, and doubt (FUD) among retail investors has reached extreme levels, which historically can signal that the market is nearing a short-term bottom and preparing for a swift rebound. Investors are closely watching the broader economic implications of the political conflict surrounding tariff policies while seeking appropriate 대응 strategies.

The digital asset market once again stands at a critical inflection point as the Trump administration’s unpredictable policy moves converge with deteriorating technical indicators. Whether Bitcoin can reclaim $66,000 to put an end to the downtrend, or fall toward the mid-$50,000 support levels warned of by Martinez, will depend on price action in the coming days. As global investors focus on statements from the White House and changes in on-chain data, market tension remains at an all-time high.

Disclaimer: This article is for investment reference only, and no responsibility is taken for any investment losses resulting from its use. The content should be interpreted for informational purposes only.