Crypto Market Stabilizes After Record $20B Deleveraging, Structural Demand Remains Strong

The crypto market experienced its largest-ever leverage wipeout, erasing speculative positions but leaving long-term conviction intact. According to Glassnode and CryptoQuant, underlying liquidity and structural demand remain robust, with steady whale accumulation, rising USDT supply, and continued ETF inflows supporting the market.

Despite the short-term turmoil from the record $20 billion liquidation, both firms highlight that capital has largely stayed inside the system, signaling resilience among long-term investors.

---

Structural Demand Holds

CryptoQuant notes that although short-term momentum has weakened, large holders continue to accumulate, while fiat liquidity grows. The USDT supply has increased by nearly $15 billion in the past 60 days, marking the fastest pace since January, and U.S. spot Bitcoin ETF inflows have reached $3.5 billion.

Glassnode echoes this, interpreting the data as evidence that capital remains in the market even after speculative risk was purged.

---

Divergent Perspectives on Recovery

Where the two analyses differ is tone and timing.

• Glassnode frames 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, on the other hand, interprets the same data more constructively. It identifies $115,000, the on-chain realized price for traders, as a critical level. Sustained movement above this threshold could signal the start of a new bullish phase, supported by stablecoin liquidity and ongoing whale accumulation.

The contrasting views illustrate a broader market divide: a cautious reset versus a potential inflection point.

---

Transitioning from Excess to Equilibrium

Both firms suggest the market is moving from excess to equilibrium. Capital continues flowing via ETFs and stablecoins, but positioning remains defensive, and confidence will need time to recover. The next move for Bitcoin—whether a rebound or prolonged consolidation—will likely depend on how quickly structural demand translates into renewed risk-taking.

---

Market Snapshot

BTC: Bitcoin fell to around $112,700 after an early dip below $110,000. Profit-taking and renewed trade tensions from President Trump weighed on risk assets, but prices stabilized following Fed Chair Jerome Powell’s signals that the central bank is nearing the end of its tightening cycle.

ETH: Ether traded near $4,101, down 3.7%, as open interest dropped to its lowest level since May. Profit-taking accelerated after rejection near $4,270, though CME traders and ETF inflows indicate continued institutional support.

Gold: BlackRock’s Evy Hambro forecasts gold could climb past $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, investor demand, and structural trends favoring real assets. Short-term consolidation remains a risk.

Nikkei 225: Asia-Pacific markets opened higher on Wednesday, with Japan’s Nikkei 225 up 0.3%, even as renewed U.S.-China trade tensions and threats of “retribution” from President Trump kept volatility elevated.