Bitcoin's deleveraging phase is indicated by on-chain data shifts in liquidations and profit-taking, coupled with sentiment and spot flow stabilization from major ETFs and holders, ending in late 2025.
Stabilization signals potential recovery, with market analysts watching indicators across exchanges and institutional reports for signs of renewed buyer interest and price consolidation.
The end of Bitcoin’s deleveraging phase is marked by the stabilization of spot flows from institutions. This period follows a series of large liquidations and profit-taking activities that have dominated the market context. Major Bitcoin holders and institutional spot ETF managers lead the stabilization efforts. This is occurring amid continued liquidity tightening by the U.S. Federal Reserve, impacting the broader financial environment. Federal Reserve Officials continue to stress a hawkish outlook and slow rate cuts—tightening global liquidity.
Shift in Market Sentiment
The market is experiencing a shift in sentiment from panic to consolidation. This transition can be attributed to reduced volatility and narrowing price ranges, which has affected the broader crypto sector. Financially, Bitcoin and related assets have faced significant sell-offs, yet stabilization indicators suggest an improving outlook. These changes are crucial as the market adjusts to new liquidity conditions imposed by global financial policies.
Financial Indicators and Historical Trends
Key financial indicators show a reduced likelihood of further downside, with on-chain data supporting a stabilization narrative. Open interest and derivatives markets are adjusting as traders anticipate potential upward trends in Bitcoin pricing. Historical trends suggest that once deleveraging pressures ease, markets may enter a recovery phase. Data highlights a similar pattern seen in previous market crashes, where stabilization leads to gradual recovery in price action and investor confidence.
Bitcoin is currently undervalued by $16,000 relative to gold on a volatility-adjusted basis.
This evolving situation remains under close watch as traders and analysts look for further signs of recovery. The potential for Bitcoin to act as a secondary safe haven, sharing some of gold's resilience attributes, continues to be discussed within financial circles.