Bitcoin (BTC) did not see a “massive futures margin call” as BTC price action plumbed two-month lows, analysis says.

In a thread on X (formerly Twitter) on May 2, Checkmate, the lead on-chain analyst at blockchain data firm Glassnode, revealed a key change in the Bitcoin bull market.

Analysis: Derivatives not "dominant" in BTC price sell-off

Bitcoin may have shocked some with its move to $56,500 on May 1, but in broader terms, this bull market pullback appears cathartic for market health.

As Checkmate shows, a gradual “de-leveraging” across Bitcoin futures has been ongoing since Bitcoin’s latest all-time highs in mid-March. This, he argues, is putting an end to “bull market excess.”

“For those of you around in the 2021 Bitcoin bull market, you will remember the massive derivatives led deleveraging events which killed it,” part of one post stated.

“Are we seeing a derivatives led flush out today? I don’t think so.”

An accompanying chart compared the comedown from Bitcoin’s trip to $58,000 during Q1 2021.

Checkmate referenced continued flat funding rates across derivatives as a clear distinguishing factor between the market now and three years ago.

“Funding rates have cooled off gradually, not violently, which is very healthy to see. It suggests we didn't see a massive futures margin call yesterday,” he wrote.

With that, attention turned to other sources for the latest BTC price cascade downward — one which at the time of writing had failed to recover much beyond the lows.

“Futures markets also saw two statistically significant deleveraging events prior to this sell-off,” the thread noted alongside a chart of the 7-day change in Bitcoin futures open interest levels.

“We did hit two overheated points on the rally into the $73k ATH, but it cooled off quickly. Again, doesn't feel like derivatives were the dominant factor in this Bitcoin sell-off.”

Bitcoin slides below ETF cost basis

On the topic of selling, the United States spot Bitcoin exchange-traded funds (ETFs) witnessed net outflows of more than half a billion dollars on May 1.

Related: Is Bitcoin price bouncing at 57K? Here's why these levels are key

In what could be a knee-jerk reaction to BTC price performance by investors, even BlackRock’s iShares Bitcoin Trust (IBIT) shed nearly $40 million — its worst day on record.

A similar story was visible for all the ETF products, with negative flows across the board, per data from sources including United Kingdom-based investment firm Farside.

The largest outflow came from Fidelity Investments’ Fidelity Wise Origin Bitcoin Fund (FBTC) at $191 million.

“Bitcoin price path to create more fear across the market and then bottom for upward continuation,” popular trader Mikybull Crypto argued in part of an X response.

“IBIT experienced $36.9M its first-ever outflows since ETF approval due to the price currently being below the cost basis. Remember in every BTC bull cycle, good news always signals the top while bad news signals the bottom.”

The post revealed a significant reset in crypto market sentiment, with the Crypto Fear & Greed Index returning to “neutral” territory at 43/100 — its lowest since September last year.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.