Bitcoin (BTC) rebounded from a local low near $114,800, closing last week about 2.1% higher at $119,580 and turning the range floor into tentative support, according to Bitfinex Alpha’s July 28 report. 

The recovery has stabilized spot prices, but derivatives data suggest a more fragile backdrop as leverage rebuilds across major and altcoins.

Leverage runs hot

The brief dip inflicted outsized damage on leveraged longs. Between July 23 and July 24, more than $1.1 billion in long positions were liquidated across major centralized venues.

According to the report, this movement as a reminder that even modest spot pullbacks can trigger aggressive deleveraging when positioning runs hot. Liquidations have stayed elevated, averaging $350 million per day across longs and shorts over the past 30 days.

The three‑day slide of roughly 5% experienced by BTC from July 23 to 25 snowballed into $1.46 billion in long liquidations, including $370 million tied to Bitcoin. 

Altcoins were hit harder on a relative basis, as the ratio of altcoin liquidations to BTC liquidations reached historically high levels, highlighting how crowded and sensitive high-beta exposures have become.

Open interest (OI) composition reinforces the shift in risk. Bitcoin OI dominance has fallen to 41%, down from 51% three months ago. In comparison, Ethereum (ETH) OI has risen from 17% to 26%, reflecting speculation around exchange-traded funds (ETFs), progress in scaling, and growing institutional activity. 

Altcoins collectively hold OI dominance in the low 30% range, but the mix is shifting quickly as capital rotates to new narratives and listings.

In absolute terms, the leverage build is stark. Since early July, combined open interest across leading altcoins, including ETH, Solana, XRP, and Dogecoin, has jumped from $26 billion to $44 billion, signaling a surge in speculative capital and heavier use of futures leverage.

Fragile phase ahead

The combination of spot stabilizing at a range low while leverage expands tends to produce reflexive conditions. 

The report noted that momentum can lead to increased risk-taking. Still, any stall or negative headline can trigger a cascade of liquidations, sharp reversals, and exaggerated volatility, particularly in thinner altcoin books. 

BTC remains structurally sound, yet systemic fragility is rising beneath the surface as risk disperses away from Bitcoin.

The report concluded that the implication is straightforward for traders. The $114,800 area matters for near‑term trend validation, but discipline may matter more. 

Sizing for volatility, watching funding and basis, and respecting that a leverage‑heavy market can move faster than the spot chart implies. If leverage cools, the bounce can build. If it doesn’t, the next shock could test that newfound support.

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