Bitfinex Report: Bitcoin Sell-off Transitioning to Market Absorption Phase

March 3: Bitfinex released a report noting that despite intense selling pressure on BTC, the $60k-$62k range remains solid. This signals forced selling is gradually shifting to market absorption rather than a new round of capitulation. Derivatives positioning confirms leverage has fully reset: futures open interest has dropped over 50% from its October peak. Following the escalation of the Iran situation, funding rates briefly turned sharply negative—indicating market sentiment has bottomed out and short positions are relatively large. Historically, such extreme conditions set the stage for a short squeeze rebound if spot demand follows. However, the options market tells a more nuanced story: recent option skew still reflects a defensive stance, with strong demand for downside protection. Meanwhile, quarterly positions for late March show a clear bullish bias, concentrated in the $80k-$90k range.