"Bitcoin's Historical Reset: Is the Market Coming to Balance?"

Recently, the decline in Bitcoin has been described as the largest reset in history, despite being a challenging period for investors. The sudden collapse in the Bitcoin (BTC) market may have painful short-term consequences, but it could lay the groundwork for a new rise in the long term. CryptoQuant analysts have defined this counterfeiting process as the largest leverage reset in history.

In the past week, the open positions in Bitcoin futures have sharply declined from $47 billion to $35 billion, resulting in a $12 billion decrease. This situation indicates that leveraged positions have been significantly closed, and risk appetite has diminished. During this process, funding rates temporarily turned negative during sharp sell-offs, revealing that investors holding long positions were liquidated. However, after the decline, these rates became positive again. The CryptoQuant analyst states that this situation indicates that the market balance is gradually being restored.

Analysis shows that Bitcoin Leverage Ratio (ELR) data has experienced a significant drop from the highest levels seen since 2022. This decline confirms that there is a general process of leverage reduction in the derivatives market. Additionally, the Stablecoin Supply Ratio (SSR) has fallen to its lowest level since April. This indicates an increase in stablecoin liquidity in the market and thus new buying power.

Historically, similar scale leverage cleanouts have often been precursors to long-term upward trends. Therefore, the current large reset signals healthier price formation in the Bitcoin market and potentially strong recovery. It is important for investors to track how this new balancing process will progress and assess potential opportunities.