The Daily Hodl

At first glance, Bitcoin’s price action looks confusing. On one side, you have strong bullish signals: Strategy (formerly MicroStrategy) buying $2.13 billion worth of Bitcoin, spot Bitcoin ETFs absorbing $1.55 billion, and around 30,000 BTC leaving exchanges, which usually indicates long-term holding. Logically, price should rise. Yet Bitcoin is dumping hard. So who’s selling?
The answer lies in leverage, not fundamentals.
Bitcoin’s market is heavily driven by leveraged traders—people using borrowed money to amplify gains. When prices move against them, exchanges automatically liquidate their positions to prevent losses from exceeding collateral. In the last 24 hours alone, $1.07 billion worth of leveraged positions were liquidated. That’s massive forced selling.
Here’s how the domino effect works. When Bitcoin’s price dips slightly, over-leveraged positions hit their liquidation levels. Exchanges then force-sell Bitcoin on the open market, adding sudden selling pressure. This pushes the price lower, which triggers even more liquidations. Each wave compounds the next, creating a sharp and fast sell-off that has nothing to do with long-term sentiment.
This is why long-term holders and institutions aren’t the problem. On-chain data shows they are largely holding or accumulating. ETFs and large buyers like Strategy operate on longer time horizons and don’t react to short-term volatility. However, their steady buying can’t instantly absorb the rapid, aggressive selling caused by liquidation cascades.
In short, Bitcoin isn’t dumping because demand disappeared—it’s dumping because excessive leverage made the market fragile. Until leverage is flushed out and open interest resets, price can continue to fall regardless of how much smart money is buying.
This is a classic crypto cycle: leverage builds → price dips → liquidations → panic → reset. Once leverage is cleared, fundamentals matter again—but in the short term, leverage always wins
$BTC