Bitcoin decline driven by derivatives liquidation

According to Jinse Finance, on-chain data shows that the recent decline in bitcoin prices has been mainly driven by forced liquidations in the derivatives market, rather than spot market sell-offs. The fundamental reason lies in the accumulation of high-leverage long positions in the futures market. When prices fall below key levels, these positions hit maintenance margin requirements and are forcibly liquidated. Liquidations are executed as market sell orders, increasing sudden selling pressure and further depressing prices. Crucially, liquidations are not only a result of price declines but also act as an "amplifier." Even a small initial drop can trigger a chain reaction of forced selling, with one liquidation leading to the next. Therefore, this round of decline should be regarded as a structural deleveraging event, rather than a collapse in fundamental demand.