Bitcoin price has recorded a sharp downturn, triggering heightened activity across the derivatives market and millions of dollars in liquidations.

Starting the month above $87,000, Bitcoin dropped to approximately $75,000 by April 7, translating to a 13.5% decline over a two-week span.

This decline follows a significant sell-off wave, coupled with mounting uncertainty linked to macroeconomic developments, including U.S. policy actions and rising interest rates. As of April 7, Bitcoin was trading at $74,818.39, marking a 10.01% drop in 24 hours and 8.60% over the previous seven days.

Plummeting Derivative Activity

Notably, derivatives trading activity responded to the volatility with a sharp increase. Total volume in the derivatives space surged by 162.70%, reaching $165.46 billion. 

Meanwhile, options trading volume rose by 255.77% to $4.92 billion, suggesting a growing interest in hedging and speculative strategies. These changes indicate that traders are positioning for more price movement in the near term.

As trading volumes soared, open interest in Bitcoin futures declined by 5.35%, down to $50.67 billion. Notably, this indicates that market participants are closing existing contracts rather than initiating new positions. Meanwhile, options open interest increased slightly by 4.80% to $23.80 billion.

Long Traders Absorb the Brunt of Liquidations

Amid the latest futures data, marketwide liquidations have intensified. In the last 24 hours, $467.60 million worth of positions were liquidated. Of this amount, $400.98 million were long positions, while $66.62 million were shorts. 

This disparity highlights the significant losses incurred by bullish traders during the steep price decline. Bitcoin position liquidation totals over shorter windows also reflect sustained pressure. Within four hours, $155.18 million was liquidated, and in the 12-hour timeframe, the total reached $282.41 million.

According to Ki Young Ju, CEO of CryptoQuant, current on-chain activity reflects bearish market trends and the end of the Bitcoin bull cycle. Using Realized Cap data, which estimates actual capital entering the market, Young Ju noted that capital inflows remain steady. 

#Bitcoin bull cycle is over — here’s why.

There’s a concept in on-chain data called Realized Cap. It works like this: when BTC enters a blockchain wallet, it's considered a "buy," and when it leaves, it's treated as a "sell." Using this idea, we can estimate an average cost… pic.twitter.com/xDHRin8N1K

— Ki Young Ju (@ki_young_ju) April 5, 2025

However, the falling Market Cap suggests this capital is not moving prices upward. Realized Cap shows actual purchase behavior through wallet activity, while Market Cap reflects how market prices react to trading volume. When Realized Cap grows without corresponding Market Cap increases, it signals increased sell pressure.

Notably, Ju pointed out that this divergence aligns with historic bear market behavior, where even large capital inflows fail to move prices.