Bitcoin Cleaning Process: A Harbinger of Rise?

Recent movements in the Bitcoin price have attracted the attention of investors. A CryptoQuant analyst notes that the deleveraging in the markets has gained momentum. This process tends to be a harbinger of strong trend reversals. It has been observed that the deleveraging in the cryptocurrency derivatives markets has gained speed again in recent weeks.

The analyst emphasized that 70-80% of the total trading volume comes from derivative products on a periodic basis. They remind us that periods of excessive leverage are not sustainable in the long run and that this situation leads to sharp liquidations. Since October 10, the market has entered a clear deleveraging phase. During this process, both highly risky long and short positions are being liquidated, and it is stated that the amount of open positions has decreased by 21% in the last 90 days. This decline indicates a significant reduction in the number of leveraged positions in the market.

The CryptoQuant analyst suggests that the current scenario, which bears similarities to previous cycles, could create a healthier foundation for the market. Historically, such processes, which "cleanse" the market of liquidations, tend to occur just before rising cycles. These stages contribute to making the market less volatile and strengthening demand again.

Considering that deleveraging levels of -24% and -29% were experienced in September 2024 and April 2025, respectively, it seems possible that a similar trend could emerge in the current situation. The CryptoQuant analyst's summarizing words are striking: “First pain… then higher.”