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all I know right now is that Bonds hold the key

and that EU bonds hold the key to US bonds which in turn hold the key to US Stks. If we start to get a liquidation trade in Bonds (which may have already started)- PS and NB all the buyers in the refunding Long Bond are currently back to break even - then they will have to sell the good to pay for the bad.
weekly mini tgt was achieved at 111.19 next level is 111.06 which is frankly a hesitation point as 111.12 is now ultra key must hold level . 109.07 is still monthly tgt
Liquidation is the same as distribution and the opposite of accumulation right? Or am I off track here? And on top of that, liquidation means that people are exiting the bond market - not necessarily selling but exiting.

So liquidation and accumulation can then only happen in the futures market where Open Interest can reduce (liquidation) or increase (accumulation) whereas in the underlying markets where we have a fixed number of bonds issued we can never change the number of bonds issued until they are redeemed.

I'm just trying to understand this right...
Yes Liquidation means Long liquidation it is the opposite of short covering. One thing that you are trying to say about O/I is partly correct however these days just becasue CTi2 sells out of a long does not mean that "they" close the Long position. Understand that the trader determines whether they "close" the open interest not the exchange. So to recap: long = o/i shows 1 then sell not to close but to open. O/I = 2. Liquidation can happen in cash markets and in that respect it is about distribution from strong hands to weak hands frequently. As to your comment about number of bonds you are partially right but these days with the amount of different product available then the sum of the parts may equal more than the whole. I give one simplistic example . A bond is made up of coupon and principal . each and every component is tradeable and can be subject to options from there you enter the world of swaps....I'll stop here as I said I would keep it simple
Note the levels mentioned above 111.06 and 111.12 and note Friday March 3rd levels. I repeat the Bonds hold the key.- Not the 10 years btw. (why? well because the 10yr is subject to the large arbitrage all day long from the EU 10 yr Bund)
Ah yes, I forgot that you can strip the coupons from the bonds and trade them separately as zero coupon bonds (both bonds and coupons become zero coupon bonds); the number of which will diminish on each coupon date: w.r.t. the coupons and the balance on redemtion date.

So the shifting of Open Interest from one CTI level to another can be used a measure distribution and accumulation depending on which level you consider to be "smart money".
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