As Bitcoin broke the key $59K support level, BTCUSDT perpetual futures longs liquidated around $120 million yesterday. While this is not a small amount, it is relatively small compared to the amount liquidated at the previous key support level of $59K, and it is hard to see a "capitulation" in the futures market just yet.

Additionally, the Funding Ratio indicator has been showing occasional negative funding ratios on an hourly basis, but the values are not dramatic enough to suggest dramatic shorting.

For a bottom to be created, we always need to see a large amount of liquidation in the futures market and a rush to short positions, but given the relatively small amount of long position liquidation and the lack of dramatic negative funding ratios, we believe that a 'capitulation' has not yet occurred in the futures market and that further downside is likely.

However, there is no need to be too negative about the market, and on-chain cycle metrics like MVRV indicate that there is upside in the cycle. In conclusion, a futures market capitulation signal would be a good signal to buy Bitcoin on the cheap.

Written by MAC_D