After plunging to $98,000, Bitcoin\u2019s price has staged a recovery, climbing back to levels above $100,000. There has also been a dramatic drop in the Estimated Leverage Ratio (ELR), which highlighted a significant investor exit from risk amid increased geopolitical tensions.<\/p>\n
In fact, the ELR plunged to -0.25 within just three days, levels not seen since the aftermath of China\u2019s 2021 crypto mining ban, when it hit -0.35, but over a longer period of one month.<\/p>\n
According to CryptoQuant\u2019s analysis<\/a>, this sharp and rapid decline signals a wave of deleveraging, where both forced liquidations and voluntary position closures have reduced Open Interest across derivatives markets. The immediate catalyst appears to be the escalating conflict<\/a> between the US and Iran, which has injected a fresh wave of uncertainty into already fragile markets.<\/p>\n Such a swift ELR contraction means that market participants are aggressively pulling back from risk, as they anticipate further volatility. While this trend reflects short-term caution, CryptoQuant suggests that panic-driven selloffs may also create strategic opportunities for longer-term investors.<\/p>\n Despite this, the current environment is one of rising unpredictability, and leveraged trades now come with amplified risk. This phase matches historical stress points and is indicative of a market recalibration that could either stabilize with time or descend further depending on macroeconomic and geopolitical developments.<\/p>\n Even as the market struggles amidst volatility, on-chain data shows<\/a> that long-term holders remain resilient, choosing to hold rather than sell.<\/p>\n One key indicator, the Binary CDD 30-day moving average, has stayed below the critical 0.8 threshold and peaked instead at around 0.6 before beginning to decline. This behavior essentially means that long-term investors are not actively moving or spending older coins. The absence of high CDD activity implies that seasoned holders still expect further upside.<\/p>\n While some cooling is evident, especially after a period of aggressive price action, the lack of major distribution from long-term wallets hints that the bull cycle remains intact. As in past cycles, Bitcoin often climbs higher in a \u201cstaircase\u201d pattern \u2013 pausing, consolidating, then rallying further.<\/p>\n The muted on-chain activity and subdued sentiment could, counterintuitively, set the stage for the next leg up, as history shows Bitcoin tends to rally hardest when few are paying attention.<\/p>\n The post Bitcoin Market Faces Sharp Deleveraging as Investors Exit Risk Positions<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" After plunging to $98,000, Bitcoin\u2019s price has staged a recovery, climbing back to levels above $100,000. There has also been a dramatic drop in the Estimated Leverage Ratio (ELR), which highlighted a significant investor exit from risk amid increased geopolitical tensions. In fact, the ELR plunged to -0.25 within just three days, levels not seen […]<\/p>\n","protected":false},"author":0,"featured_media":75403,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-75402","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/75402"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=75402"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/75402\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/75403"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=75402"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=75402"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=75402"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Bitcoin\u2019s Bull Cycle May Still Be Intact<\/h2>\n