Crypto Weekend Rebound Lacks Fresh Leverage, Signaling No Trend Reversal Yet

The weekend rebound in cryptocurrencies appears to be a technical bounce during a deleveraging phase rather than the start of a broader trend reversal.

BlockBeats, a crypto-focused media outlet, reported on June 8 that on-chain analyst Axel Adler Jr. said the market had faced its strongest selling pressure of the month over the previous five days. Buying interest later recovered somewhat, but open interest in derivatives fell, indicating that fresh leverage has yet to return.

Net market order volume reached negative $236 million during that stretch, and Bitcoin briefly fell to $60,500, Adler said.

Starting June 7, more aggressive buying began to reappear. Short-term order flow shifted back toward demand, but derivatives markets have yet to confirm the move. According to Adler, futures open interest fell to $1.55 billion from a June 7 peak of $1.65 billion, a drop of about 6%.

By contrast, funding rates stayed positive over the past 24 hours. They mostly ranged from +0.001% to +0.020%.

The combination of rising prices, falling open interest and positive funding rates usually signals that the market is still deleveraging, Adler said. Existing positions are being unwound, while new leveraged long positions have not yet built up sufficiently.

He said the rebound was still meaningful because it was accompanied by genuine buying. Still, the continued decline in open interest shows that demand has not been supported by an expansion in new positions.

"This rebound is real, but empty from a leverage standpoint," Adler said. He added that the move is closer to a deleveraging bounce than a full trend reversal driven by fresh leveraged capital.