Summary
BTC experienced a sharp drop over the weekend, but on-chain data did not show the same level of panic. Realized losses measured at the entity level did not increase; instead, they actually declined. This suggests that the sell-off has not yet developed into a typical wave of panic selling among on-chain holders.
At the same time, perpetual futures open interest (OI) has continued to build since October 14. Previous pullbacks did not lead to significant deleveraging, and yesterday’s decline also failed to clear a meaningful amount of leverage.
This leaves the market in an interesting position: both longs and shorts are continuing to build new positions. If weekend illiquidity simply amplified short-term selling pressure on exchanges, the more important issue may not be yesterday’s decline itself, but the large amount of leverage that remains in the market.
Once the price triggers liquidation zones on either side, the market could experience another sharp expansion in volatility.
BTC experienced another sudden drop yesterday.
After the price weakened quickly, it is easy for the market to fall into a familiar mindset:
“Is BTC going to fall again?”
But when we look at the data beyond price, yesterday’s move appears more complicated.
The reason is simple: on-chain data did not show a corresponding wave of panic.
Realized losses measured at the entity level did not increase significantly. Instead, they declined.
In other words:
The price fell, but on-chain holders did not show the same level of panic-driven selling.
At the same time, there is another issue that may be even more important:
Perpetual futures OI has been building since October 14.
Each time the price pulled back, leverage did not decrease significantly.
Even yesterday’s decline failed to produce meaningful deleveraging.
This creates a particularly interesting market structure:
The spot market has not shown obvious panic, while the derivatives market continues to accumulate positions.
This could mean that yesterday’s decline was not necessarily a sign that the broader trend has completely weakened.
But it could also mean that the market is accumulating fuel for the next major volatility event.
Why Is This Weekend Sell-Off Worth Watching Separately?
The same decline can have very different implications depending on whether it happens on Monday or Saturday.
One reason is that market liquidity is generally thinner over the weekend.
Traditional financial markets are closed, while some institutional trading and risk-management activities are reduced. Market-making and hedging liquidity can also differ from normal weekdays.
Under these conditions:
A sell order of the same size can have a larger impact on price.
That is why yesterday’s move needs to be viewed together with when it happened.
One possible explanation is that some coins that had already been transferred to exchanges used relatively thin weekend liquidity to put pressure on the market.
If that is the case, yesterday’s decline may have been closer to a:
liquidity-driven short-term price shock
rather than a broad panic exit by long-term holders.
Of course, this does not mean the decline had no fundamental reason.
Nor can we simply conclude that someone was deliberately trying to trigger liquidations.
Instead of asking:
“Who exactly was dumping BTC?”
It may be more useful to ask an objective question:
Did on-chain holders actually show significant panic after the price decline?
If the price dropped sharply while entity-adjusted realized losses did not increase at the same time, that at least suggests that the decline has not yet fully developed into panic selling among on-chain holders.
Why Did the Price Fall Without a Clear On-Chain Panic?
This is one of the most important aspects of the current move.
Normally, if BTC enters a sustained panic-driven decline, on-chain data may show several changes:
- Holders begin selling at a loss
- Realized losses increase rapidly
- Long-term holders begin releasing supply
- Market sentiment deteriorates significantly
But yesterday’s move did not completely show this structure.
Entity-adjusted realized losses actually declined.
This means that:
The realization of losses by on-chain holders did not increase alongside the price decline.
In other words:
The price pressure visible on exchange order books and the behavior of on-chain holders are not fully synchronized at the moment.
This creates an important distinction:
A price decline does not automatically mean the entire market is in panic.
Market prices are ultimately determined by marginal transactions.
When liquidity is relatively thin, a limited amount of additional selling pressure can create a significant price move.
But if a large number of long-term holders are not selling at the same time, the market meaning of the decline needs to be reassessed.
So rather than immediately concluding:
“BTC’s trend is over.”
It may be better to ask:
Has this decline actually transmitted into the behavior of on-chain holders?
The Real Danger May Be That OI Has Not Come Down
If on-chain data has not yet shown significant panic, the more important risk may actually come from:
Perpetual futures open interest.
Since October 14, perpetual futures OI have continued to increase.
Normally, after a significant and rapid decline, we would expect some degree of deleveraging.
Why?
- Long positions get liquidated
- Shorts take profits
- Highly leveraged traders exit
- Overall market risk exposure decreases
As a result, OI would normally fall to some degree.
But the current problem is:
Every time the price pulls back, the OI has not declined significantly.
What does this mean?
Simply put:
Market participants have not been exiting the derivatives market on a large scale despite the price decline.
Instead, new positions may still be entering the market.
This creates a potentially dangerous structure:
Price consolidates → OI increases → Price pulls back → OI continues to build.
The leverage has not really been cleared.
Why Could Rising OI Signal That Larger Volatility Is Approaching?
OI itself is neither bullish nor bearish.
It simply represents:
How much open contractual risk remains in the market.
When OI continues to rise, more positions are waiting for the market to choose a direction.
And that is where the problem begins.
These positions eventually need to be resolved.
Suppose the market currently contains a large number of both long and short positions.
As long as the price remains relatively stable, both sides can maintain their positions.
But once the price suddenly breaks in one direction:
- Longs may be forced to chase higher
- Shorts may be forced to stop out
Or the opposite may happen:
- Longs begin getting liquidated
- Shorts continue adding positions
This can create a familiar feedback loop:
Price moves → Liquidations → More price movement → More liquidations
That is why the most dangerous aspect of a high-OI market may not be the current price itself.
It is:
How much unresolved leverage has accumulated in the market.
Why Didn’t Yesterday’s Drop Complete the Deleveraging Process?
This may be one of the most important questions in the current market.
If yesterday’s decline was significant enough, it should theoretically have cleared some highly leveraged long positions.
But if OI remains elevated or continues to build, it suggests:
Yesterday’s decline did not truly clean out the market’s leverage.
Several scenarios are possible.
First:
Some long positions were liquidated, but new longs quickly replaced them.
Second:
Some traders opened short positions during the decline, causing short exposure to increase at the same time.
Third:
Both sides believe the current move is only a short-term fluctuation and continue building directional positions.
The result is:
The price fell, but overall leverage did not decline significantly.
This may be more important than the price decline itself.
If a sharp sell-off completes meaningful deleveraging, the market may actually become healthier afterward.
But if:
Price falls → OI barely declines → Both sides continue opening positions
then the next volatility event could be even more intense.
Two Completely Opposing Forces May Now Be Building
This is also what makes the current market structure particularly interesting.
On one side:
Bullish traders.
They may believe yesterday’s decline was simply a short-term liquidity shock.
There was no obvious on-chain panic, and long-term holders did not appear to exist in large numbers. From this perspective, the pullback could be viewed as an opportunity to rebuild positions.
On the other hand:
Bearish traders.
They see weakening price action and continuously rising OI, and may interpret this as the market accumulating more downside fuel.
So they continue building short positions.
The result is:
Longs are buying, while shorts are also opening positions.
It sounds contradictory.
But this is completely normal in derivatives markets.
Every new long position corresponds to a new short position.
Therefore:
Rising OI only tells us that the market battle is becoming more intense. It does not tell us who will ultimately win.
The real question is:
Which side loses the ability to withstand the price move first?
The Next Major Move May Be Triggered by Leverage, Not News
If the market has accumulated a large number of long and short positions, the next major move may not require a major fundamental catalyst.
A relatively limited price movement could become the trigger.
For example:
BTC suddenly breaks above a key resistance area.
Some shorts stop out.
Short covering creates additional buying pressure.
The price rises further.
More shorts are liquidated.
Liquidations create even more buying pressure.
Eventually:
Rally → Short covering → Liquidations → Further rally
The same mechanism works in the opposite direction.
If BTC breaks below a key support level:
- Longs stop out
- Longs are liquidated
- Liquidations create additional selling pressure
- More longs are forced to exit
Eventually:
Decline → Long liquidations → More selling → Deeper decline
So the most important question right now may not be:
“Will BTC go up or down next?”
It may be:
“Which side of the leverage gets triggered first?”
This Is Actually the Same Question We Discussed in the Previous BTC Article
In the previous article, we discussed whether BTC’s move toward $81,000 and the accompanying increase in volume represented genuine buying.
The key question was:
Don’t just look at how far the price has fallen. Look at whether buyers are actually staying.
Now there is another variable:
Is leverage staying?
These two questions can be viewed together.
If:
Price pulls back → Spot buyers absorb supply → No major on-chain panic → OI declines
then the market may be going through a relatively healthy risk-release process.
But if:
Price pulls back → No obvious on-chain panic → OI continues increasing
then the market may instead accumulate new volatility risk.
Therefore:
No panic does not mean no risk.
In fact, if the spot market remains relatively calm while derivatives leverage continues building, the market may simply transfer risk from:
Spot selling
to:
Future liquidations.
Three Signals Worth Watching Next
If we want to assess where the next major market move could expand, three indicators deserve particular attention.
When Does OI Actually Start Falling?
If BTC experiences another significant decline while OI drops rapidly, that would suggest genuine deleveraging is finally taking place.
In that case, some market risk may be released.
But if BTC continues falling while OI remains elevated or keeps increasing, the risk of another larger volatility event should be monitored closely.
Does On-Chain Realized Loss Suddenly Expand?
If BTC continues weakening while realized losses remain relatively calm, long-term holders may still not be showing significant panic.
But if realized losses suddenly accelerate, we would need to reassess whether the decline has started transmitting from the derivatives market into spot holders and on-chain behavior.
Which Side Starts Experiencing Consecutive Liquidations?
This is one of the most direct market signals.
If liquidations on one side begin accelerating, it indicates that positions are being forced out.
Liquidations themselves can then push the price further.
This can create a short-term self-reinforcing loop:
Liquidations → Price movement → More liquidations
KTX Crypto Insight: The Real Question Is Not How Much BTC Fell Yesterday, but Whether Leverage Has Been Cleared
On the KTX BTC/USDT Spot Trading Page, the key question right now is not:
“Has yesterday’s decline already bottomed?”
It is:
“Did yesterday’s decline actually release market risk?”
Several indicators can be viewed together:
BTC price structure → Trading volume → On-chain realized P&L → Perpetual OI → Long/short positioning → Liquidation volume → Sustainability of capital flows
OI deserves particular attention.
If:
Price falls → OI declines significantly
that may indicate that the market is going through a genuine deleveraging process.
But if:
Price falls → OI does not decline → Both sides continue opening positions
then leverage risk may continue accumulating.
In that case, the next major volatility event could be even more significant than yesterday’s move.
Users can check BTC’s real-time price, 24-hour performance, trading volume and market activity through the KTX BTC/USDT trading page.
To explore KTX’s other spot, derivatives and trading products, visit the KTX official website.
The key point is:
The market does not automatically complete deleveraging just because prices fall once.
What matters is whether the risk has actually been released after the decline.
FAQ
Why is a weekend BTC sell-off particularly worth watching?
Weekend market liquidity is generally thinner, while some institutional and traditional financial market activity is reduced. As a result, selling orders of the same size may have a larger impact on price.
However, a weekend decline alone does not prove that the move was an artificial “dump.” Trading volume, on-chain data and derivatives data still need to be considered together.
Why did the price fall while realized losses declined?
This suggests that, based on the current data, on-chain entities did not show a significant increase in realized losses.
Therefore, the decline has not yet displayed the characteristics of a clear on-chain panic sell-off.
Does continuously rising OI mean BTC will definitely fall?
No.
Rising OI only means that the amount of open derivatives exposure is increasing. It does not directly determine market direction.
Both longs and shorts can increase their positions at the same time.
The key question is:
Which side gets triggered first?
Why is it concerning if OI does not decline?
Because if the price has already experienced significant volatility while leverage remains elevated, overall market risk exposure is still relatively high.
If BTC then suddenly breaks through or below a key level, stop-losses and liquidations could accelerate and amplify the move.
Will the next major move definitely be downward?
Not necessarily.
Both longs and shorts appear to be building new positions, meaning either direction could trigger liquidations.
The key is to watch:
Which side gets triggered first, and whether liquidations create a sustained feedback loop.
Conclusion
Yesterday’s weekend decline in BTC may look like nothing more than a sharp short-term pullback.
But when on-chain and derivatives data are viewed together, a more complicated market structure emerges:
The price is falling, but on-chain panic remains limited.
At the same time:
OI continues to build.
This means yesterday’s decline may not have completed the one thing the market arguably needs most:
Deleveraging.
If some coins that had already entered exchanges did use thin weekend liquidity to create short-term selling pressure, yesterday’s move may have been closer to a liquidity shock than a broad exit by long-term capital.
But that does not mean the risk has disappeared.
Quite the opposite.
Both sides of the market are now carrying new positions.
That means:
The market may be accumulating fuel for its next major volatility event.
The question worth watching next is not simply:
“Is BTC going to keep falling?”
It is:
When will OI finally start declining?
Will on-chain realized losses suddenly expand?
Which side begins experiencing consecutive liquidations?
If longs are triggered first, the market could experience a rapid downside move.
If shorts are triggered first, the market could just as easily experience a sharp short squeeze.
So the most important question left by yesterday’s decline is not:
“Has BTC finished falling?”
It is:
“When will the leverage in the market finally be cleared?”
For BTC, the real danger is not simply falling prices.
It is:
Price volatility has already started, while leverage is still sitting in the market.
Original Source
Yesterday’s decline appears, at this point, to have been caused by some coins that had been transferred to exchanges in advance using relatively thin weekend liquidity to put pressure on the market.
Meanwhile, there was almost no corresponding emotional reaction on-chain. Entity-adjusted realized losses did not increase; instead, they actually declined.
One key factor is that the move happened over the weekend. Market makers, hedge funds and other institutions generally adjust their positions during the working week, particularly after the weekend.
So yesterday’s move can, in simple terms, be viewed as an exchange-driven “dump.”
As for whether the purpose was to trigger futures liquidations or something else, there is no need to speculate.
But since October 14, perpetual futures OI has continued to accumulate. Every pullback has failed to produce meaningful position reduction, and yesterday’s decline also failed to complete the deleveraging process.
Both longs and shorts now have new positions in the market. The next major volatility event is therefore likely to be amplified, with the key question being which side gets triggered first.
Original Author: Murphy
X: @Murphychen888
Published: October 26, 2026
Original Post: https://x.com/Murphychen888/status/2114193667175170077
Risk Warning
Cryptocurrency markets are highly volatile. BTC prices and related derivatives can be affected by a wide range of factors, including macroeconomic conditions, monetary policy, market liquidity, capital flows, market sentiment, on-chain activity and investor behavior.
The discussion of market structure, on-chain data and perpetual futures open interest in this article is provided for informational and educational purposes only and does not constitute financial, investment or trading advice. Any discussion of potential volatility, liquidation or deleveraging represents a possible market scenario and should not be interpreted as a prediction of future price movements.
Historical market patterns, on-chain indicators and derivatives data do not guarantee future performance. Investors should make independent decisions based on their own risk tolerance and fully understand the risks associated with digital asset trading.
When using futures or other leveraged products, users should fully understand margin requirements, funding rates, forced liquidation mechanisms and the risk of significant losses.