Bitcoin’s (BTC) slide below $70,000 has deepened volatility across digital asset markets, but analysts say the move reflects a structural reset rather than a breakdown in long-term confidence. The downturn triggered heavy deleveraging, with over $1 billion in leveraged positions liquidated over the past 24 hours, most of them tied to long bets, according to data from Coinglass.
Major altcoins followed Bitcoin lower, including Ethereum (ETH), Solana (SOL) and BNB, pushing total crypto market capitalization down to around $2.4 trillion as risk appetite weakened.
Deleveraging Dominates As Prices Reset
Market participants say the selloff has been driven largely by balance-sheet mechanics rather than panic.
As prices slipped through key levels, leveraged positions were forced out, amplifying downside moves and increasing intraday volatility.
Despite the sharp decline, spot buying has remained limited rather than capitulative.
Speaking with Yellow.com, analysts note that this absence of aggressive dip-buying suggests investors are exercising patience, waiting for clearer signals before committing fresh capital.
Bottoming Signals Emerge Beneath Volatility
Some investors believe prices are already trading close to a market low.
Andrei Grachev, managing partner at DWF Labs, said the market appears to be near its bottom, even if further swings remain likely.
He said prices could still fluctuate by roughly 15% around current levels, but added that professional capital is actively deploying behind the scenes.
“Professional investors are still deploying funds, especially in infrastructure, real-world assets and projects with big long-term vision,” Grachev said.
According to Grachev, limited spot buying reflects negotiating leverage rather than fear, as cash-rich investors are able to secure favorable entry conditions in a weak market.
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Institutional Flows Mask Longer-Term Commitment
Headline data has added to uncertainty, particularly after recent outflows from U.S. Bitcoin exchange-traded funds. However, analysts caution against interpreting those moves as a broad institutional retreat.
Jimmy Xue, chief operating officer and co-founder of Axis, told Yellow.com that ETF outflows are more likely tactical repositioning than a reversal of long-term strategy.
He pointed to continued balance-sheet expansion across the sector, including tens of billions of dollars raised by digital asset treasury firms last year, as evidence of sustained institutional engagement.
Xue added that market volatility is being intensified by fragmented liquidity.
Declining trading volumes and inefficiencies in decentralized exchange structures have increased price impact during stress periods, making moves appear more extreme than underlying demand alone would suggest.
Macro Pressures Reshape Crypto’s Role
Broader macroeconomic forces are also influencing market behavior.
Wenny Cai, chief operating officer at SynFutures, said investors are becoming more defensive as they reassess growth expectations, inflation risks, and policy uncertainty.
She noted that Bitcoin’s drop below the low-$70,000 range accelerated deleveraging built up during the post-ETF rally, shifting sentiment firmly into risk-off territory.
While that has weighed on prices, Cai said it does not mark the end of institutional participation.
Instead, capital is rotating toward segments focused on yield and infrastructure, including tokenized treasuries, credit products, and real-world assets.
Analysts say this shift highlights how crypto is becoming more macro-sensitive, competing directly with traditional assets in a tighter liquidity environment.
Experts argue the current phase marks the end of complacency rather than the end of the cycle, with the next recovery likely to reward selectivity, fundamentals, and balance-sheet discipline over speculative momentum.
Bitcoin is trading at $69,600 down 20% over the last 7 days at the time of publication.
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