Bitcoin Market Experiences Intense Deleveraging as Investors Withdraw from Risky Positions

Bitcoin's value has bounced back to over $100,000 after a significant drop to $98,000, marking a sharp decrease in the Estimated Leverage Ratio (ELR). This decline, unseen since China's 2021 crypto mining ban, indicates a considerable withdrawal of investors from risky positions due to growing geopolitical tensions.

The swift contraction of the ELR suggests a wave of deleveraging, with forced liquidations and voluntary position closures reducing Open Interest across derivatives markets. On the other hand, on-chain data shows long-term holders holding on, with the Binary CDD 30-day moving average staying below the critical 0.8 threshold. Despite the volatility and unpredictability, this suggests that the bull cycle might still be intact, and the current subdued sentiment could potentially pave the way for the next surge.