Cryptocurrency Market Experiences Decline as Excess Leverage is Removed

The price of Bitcoin has dropped to around $107,000 after a brief recovery period, with analysts interpreting this downturn as a market reset. On-chain data suggests that recent volatility has flushed out excess leverage without causing damage to the long-term market structure. However, some analysts believe that Bitcoin is trapped in a bearish structure and needs to reclaim the $111K threshold to rebuild confidence. Despite this, some market participants see this as an opportunity to buy, with companies such as BitMine and Ripple-backed Evernorth Holdings making significant investments. The broader crypto market is experiencing a deep phase of deleveraging, with traders stepping back as volatility rises and confidence fades. Macro shifts are supporting risk assets, with equity prices rising and gold prices falling. The technical setup appears to be dragging the wider crypto market down, with all members of the CoinDesk 20 index trading lower.