Bitcoin News Today: Bitcoin Rises 2.1% as Derivatives Leverage Triggers $1.1B Liquidations, Risks Rise

Bitcoin’s recent rebound from a local low near $114,800 has stabilized prices, but rising leverage in derivatives markets underscores growing fragility. According to Bitfinex Alpha’s July 28 report, Bitcoin closed last week 2.1% higher at $119,580, with the $114,800 level acting as tentative support. However, derivatives data reveal a surge in speculative activity that could amplify volatility risks. Between July 23 and 24, leveraged long positions across major centralized exchanges faced over $1.1 billion in liquidations, with daily average liquidations hitting $350 million over the past 30 days. A 5% three-day drop in BTC between July 23 and 25 alone triggered $1.46 billion in long liquidations, including $370 million tied to Bitcoin [1].

The shift in open interest (OI) further highlights structural changes. Bitcoin’s OI dominance has fallen to 41%—down from 51% three months ago—while Ethereum’s OI share rose to 26% from 17%, driven by ETF speculation and institutional activity. Altcoins collectively hold a low 30% OI share, but rapid capital rotation into high-beta assets like Solana, XRP, Dogecoin, and others has pushed combined open interest for leading altcoins from $26 billion to $44 billion since early July [1]. This leverage buildup has created reflexive conditions where even modest price corrections could trigger cascading liquidations.

The report warns that systemic fragility is rising as risk disperses away from Bitcoin. Altcoin liquidations relative to Bitcoin liquidations have reached historically high levels, signaling overcrowded positions. Traders are urged to monitor the $114,800 level closely for trend validation while exercising caution in a leverage-heavy environment. Discipline in position sizing, funding rate analysis, and basis tracking is critical, as markets may react faster than spot charts suggest [1]. If leverage cools, the current bounce could gain traction; persistent leverage, however, risks testing support with the next market shock.

Source: [1] [Bitcoin steadies near $114,800 but fragility risk rises as leverage climbs] [https://cryptoslate.com/bitcoin-steadies-near-114800-but-fragility-risk-rises-as-leverage-climbs/]