Bitcoin traders are increasingly seeing signs that the intense sell-off that gripped the market may be cooling off, as the token steadies after a volatile weekend. The rebound follows more than $200 million in liquidations, with data suggesting that some of the most aggressive selling has subsided, leaving room for stabilization.

Buyer Exhaustion and Short-Term Reprieve

Over the weekend, Bitcoin triggered over $206 million in leveraged liquidations, according to CoinGlass data — a clear indication that many forced sellers have now exited their positions. As liquidity thinned, the price recovered from deeply oversold levels on the RSI (Relative Strength Index), a technical signal that has historically preceded short-term bounces. Analysts at Laser Digital noted that the cooling of spot-driven selling pressure has “given the market some room to stabilise” after turbulent sessions, highlighting that derivatives-driven pressure, rather than pure spot selling, may have dominated the recent decline.

Derivatives Landscape: Fragile but Improving

Derivatives positioning remains a critical factor for Bitcoin’s near-term dynamics. Despite heavy liquidations, Laser Digital flagged a build-up of short-side leverage, with the potential for a squeeze if Bitcoin can reclaim key levels around $98,500. The firm also pointed out that many open-interest short positions remain concentrated, suggesting that a sustained move higher could force a rapid unwinding. At the same time, funding rates and option structures continue to lean defensive, underscoring lingering caution among sophisticated traders. This setup suggests that while the market is fragile, a relief rally is possible if forced shorts begin to cover.

Wider Market Context and Macro Underpinnings

Bitcoin’s recent weakness comes amid broader macro tension, including fading hopes for further U.S. rate cuts. The drop below $87,000 earlier this week extended its weekly slide to more than 13%, while ETF-related outflows and derivatives deleveraging contributed to pressure. Institutional behavior also seems bifurcated: while some remain cautious, others are interpreting the current range-bound behavior as a potential accumulation zone.

Closing the weekend bounce, traders and market participants will closely watch whether Bitcoin can hold current support or if renewed macro or derivatives-driven selling resumes. Key risks include further ETF outflows, macroeconomic headwinds, and renewed leverage imbalance. On the other hand, a stabilizing derivatives structure, increased liquidity, and easing selling pressure could set the stage for a technically driven rebound — making this a crucial juncture for Bitcoin’s short- to mid-term trajectory.