The below is from a recent edition of the Deep Dive, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

Almost immediately after we released our November Monthly Report last Friday, the bitcoin market experienced a series of swift liquidations taking price down to a potential bottom around $42,000.

We highlighted the increased risk of the overextended total futures open interest and long liquidations in the monthly report saying,

“The bitcoin total futures open interest in the derivatives market has risen to new elevated levels that have historically preempted increased healthy, liquidation flushes in the market. Although futures open interest is elevated largely because of increased CME Futures ETF demand, the rise is still cause for concern as perpetual funding rates rise higher as price is falling. These dynamics usually signal a derivatives market reset and thus a lower bitcoin price.”