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After plunging to $98,000, Bitcoin\u2019s price has staged a recovery, climbing back to levels above $100,000. There has also been a dramatic drop in the Estimated Leverage Ratio (ELR), which highlighted a significant investor exit from risk amid increased geopolitical tensions.<\/p>\n
In fact, the ELR plunged to -0.25 within just three days, levels not seen since the aftermath of China\u2019s 2021 crypto mining ban, when it hit -0.35, but over a longer period of one month.<\/p>\n
According to CryptoQuant\u2019s analysis<\/a>, this sharp and rapid decline signals a wave of deleveraging, where both forced liquidations and voluntary position closures have reduced Open Interest across derivatives markets. The immediate catalyst appears to be the escalating conflict<\/a> between the US and Iran, which has injected a fresh wave of uncertainty into already fragile markets.<\/p>\n Such a swift ELR contraction means that market participants are aggressively pulling back from risk, as they anticipate further volatility. While this trend reflects short-term caution, CryptoQuant suggests that panic-driven selloffs may also create strategic opportunities for longer-term investors.<\/p>\n Despite this, the current environment is one of rising unpredictability, and leveraged trades now come with amplified risk. This phase matches historical stress points and is indicative of a market recalibration that could either stabilize with time or descend further depending on macroeconomic and geopolitical developments.<\/p>\n Even as the market struggles amidst volatility, on-chain data shows<\/a> that long-term holders remain resilient, choosing to hold rather than sell.<\/p>\n One key indicator, the Binary CDD 30-day moving average, has stayed below the critical 0.8 threshold and peaked instead at around 0.6 before beginning to decline. This behavior essentially means that long-term investors are not actively moving or spending older coins. The absence of high CDD activity implies that seasoned holders still expect further upside.<\/p>\n While some cooling is evident, especially after a period of aggressive price action, the lack of major distribution from long-term wallets hints that the bull cycle remains intact. As in past cycles, Bitcoin often climbs higher in a \u201cstaircase\u201d pattern \u2013 pausing, consolidating, then rallying further.<\/p>\n The muted on-chain activity and subdued sentiment could, counterintuitively, set the stage for the next leg up, as history shows Bitcoin tends to rally hardest when few are paying attention.<\/p>\n LIMITED OFFER for CryptoPotato readers at Bybit: Use this link<\/a> to register and open a $500 FREE position on any coin!<\/b><\/p>\n<\/div>\n<\/div>\nBitcoin\u2019s Bull Cycle May Still Be Intact<\/h2>\n
\nBinance Free $600 (CryptoPotato Exclusive): Use this link<\/a> to register a new account and receive $600 exclusive welcome offer on Binance<\/b> (full details<\/a>).<\/p>\n