- Crypto analyst Adam Cochran highlighted that long positions on exchanges caused the recent Bitcoin price drop.
- Cochran explained that open interests on exchanges were too high, and most traders were leveraged on long positions.
- The analyst said the long position liquidation was the market balancing itself, as perpetual markets are designed to be balanced.
Following the unexpected slump in Bitcoin’s price yesterday, Adam Cochran – a fintech executive and renowned crypto Twitter analyst – took to X (formerly Twitter) to explain what caused the sudden drop.
In the series of tweets, Cochran highlighted that the recent decline was caused by the soar in open interest (OI) across exchanges. According to the analyst, bullish expectations for the largest cryptocurrency by market cap were high, and thus, long positions on exchanges were significantly elevated.
In particular, the analyst noted this trend on the cryptocurrency trading platform, ByBit. Cochran remarked, “ByBit degens, who, while sitting at nearly the same OI as Binance, were so leveraged long they were paying 40% annual funding rates.”
While noting that traders taking one side of the tra…
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