Crypto Markets Stabilize After $20B Deleveraging; Structural Demand Holds Firm
Crypto markets endured their largest-ever leveraged liquidation, wiping out speculative positions but leaving long-term capital intact. According to Glassnode and CryptoQuant, steady whale accumulation, rising USDT supply, and ongoing ETF inflows continue to provide a strong foundation for the market.
Despite short-term volatility, analysts say the market’s structural demand remains resilient, signaling that long-term investors are holding steady even after the massive $20 billion sell-off.
Structural Support Underpins Market Stability
CryptoQuant reports that while short-term momentum has weakened, large holders continue to accumulate, and fiat liquidity is still building. The USDT supply has increased by nearly $15 billion over the past 60 days, the fastest pace since January, while U.S. spot Bitcoin ETF inflows have reached $3.5 billion.
Glassnode confirms that this trend reflects capital remaining in the system, with the sell-off primarily flushing out speculative risk rather than long-term conviction.
Differing Views on Market Outlook
The two firms diverge on tone and timing:
- Glassnode characterizes the sell-off as a structural purge, removing speculative excess and forcing traders into defensive positions. Funding rates have halved, perpetual CVDs turned negative, and options traders are paying higher premiums for downside protection. Glassnode views the market as digesting losses and rebuilding confidence rather than preparing for an immediate rebound.
- CryptoQuant takes a more constructive perspective, pointing to $115,000—the on-chain realized price for traders—as a key level. A sustained move above this threshold could indicate the start of a new bullish phase, fueled by expanding stablecoin liquidity and continued whale accumulation.
This contrast illustrates the market divide: a cautious reset versus a potential turning point.
Moving from Excess to Equilibrium
Both reports suggest the market is transitioning from excess to equilibrium. Capital continues to flow through ETFs and stablecoins, but positioning remains defensive, and confidence will require time to rebuild. Bitcoin’s next move—whether a rebound or prolonged consolidation—will depend on how quickly structural demand converts into fresh risk-taking.
Market Snapshot
BTC: Bitcoin dipped to roughly $112,700 after briefly trading below $110,000. Profit-taking and renewed U.S.-China trade tensions pressured risk assets, though prices stabilized following Fed Chair Jerome Powell’s remarks that the central bank is approaching the end of its tightening cycle.
ETH: Ether traded near $4,101, down 3.7%, with open interest falling to its lowest level since May. Profit-taking accelerated after a rejection near $4,270, though CME traders and ETF inflows continue to offer institutional support.
Gold: BlackRock’s Evy Hambro expects gold to climb above $4,200 amid currency repricing against real assets, while Bank of America projects gold at $5,000 and silver at $65 by 2026, citing fiscal deficits, strong investor demand, and structural trends favoring real assets despite short-term consolidation risks.
Nikkei 225: Asia-Pacific markets opened higher on Wednesday, with Japan’s Nikkei 225 up 0.3%, despite U.S.-China trade tensions and President Trump’s “retribution” rhetoric keeping volatility elevated.
