Bitcoin prices have plunged to their lowest levels since late February as the crypto market correction intensifies, with analysts pointing to spot-driven weakness rather than leveraged derivatives as the primary cause.

On May 1st, Bitcoin fell to a nine-week low, dipping just below $57,000 and marking a further 4% decline for the day. The cryptocurrency has witnessed a significant 11% drop since the same time last week, reflecting the severity of the ongoing correction.

While market dips and flush-outs are not uncommon in the crypto space, Glassnode analyst James Check believes that this correction differs from previous ones, notably due to the absence of large derivatives-led deleveraging events.

Check emphasized that funding rates, which dictate fees on derivatives exchanges to maintain contract price balance, have cooled off gradually rather than violently. This suggests that there wasn't a massive futures margin call contributing to the recent sell-off.

Furthermore, Check highlighted a decline in Bitcoin futures Open Interest (OI) over the past year in BTC terms, indicating a relative reduction in leverage. He noted that while futures markets did experience significant deleveraging events prior to the recent sell-off, derivatives did not dominate the factors driving Bitcoin's decline.

Instead, Check attributed the sell-off to spot-driven weakness, citing short-term sell-side pressure and weaker demand as contributing factors.

Despite the market downturn, demand for derivatives remains healthy, with around $1.3 billion in Open Interest for Friday's Bitcoin options expiry event, according to Deribit.

The broader crypto market has also felt the impact of the correction, with total market capitalization plummeting by over $240 billion over the past week, reaching $2.26 trillion during Thursday morning trading in Asia. This represents a 22% decline from its 2024 peak level of around $2.9 trillion.

Technical analyst 'Rekt Capital' remains optimistic, viewing the current phase as a historically recurring re-accumulation period, suggesting potential resilience and recovery in the crypto markets moving forward.