Asia Morning Briefing: Record $20B Liquidation Tests Bitcoin, Structural Demand Provides Support

Crypto Market Steadies After Record $20B Deleveraging; Structural Demand Supports Recovery

Crypto markets experienced their largest-ever leveraged liquidation, wiping out speculative positions but leaving long-term capital intact. Analysts at Glassnode and CryptoQuant note that whale accumulation, rising USDT supply, and ongoing ETF inflows continue to underpin the market.

Despite short-term chaos, both firms highlight that structural demand remains strong, signaling that the market’s foundation is resilient even after massive sell-offs.

Strong Underlying Demand

CryptoQuant points out that while short-term momentum has softened, large holders are still accumulating. USDT supply has expanded by nearly $15 billion over the past 60 days, the fastest pace since January, and U.S. spot Bitcoin ETF inflows have reached $3.5 billion.

Glassnode agrees, interpreting these trends as evidence that capital remains inside the system, even after speculative risk was flushed out.

Divergent Views on Market Outlook

The two firms differ on timing and tone:

Glassnode views the sell-off as a structural purge, removing excess speculation and forcing traders into defensive positions. Funding rates have halved, perpetual CVDs turned negative, and options traders are paying higher premiums for downside protection. Glassnode sees the market as digesting losses and rebuilding confidence, rather than preparing for an immediate rebound.
CryptoQuant offers a more constructive perspective, highlighting $115,000—the traders’ on-chain realized price—as a key level. A sustained move above this threshold could signal a new bullish phase, supported by growing stablecoin liquidity and ongoing whale accumulation.

This contrast reflects a broader market divide between a cautious reset and a potential inflection point.

Moving Toward Equilibrium

Both reports suggest the market is transitioning from excess to equilibrium. Capital continues flowing via ETFs and stablecoins, but positioning remains defensive. Whether Bitcoin rebounds quickly or enters a longer consolidation phase depends on how rapidly structural demand converts into fresh risk-taking.

Market Highlights

BTC: Bitcoin dipped to around $112,700 after briefly trading below $110,000. Profit-taking and renewed trade tensions from President Trump pressured risk assets, though prices steadied following Fed Chair Jerome Powell’s comments signaling the nearing end of the tightening cycle.

ETH: Ether traded near $4,101, down 3.7%, as open interest fell to its lowest since May. Profit-taking intensified after rejection near $4,270, but CME traders and ETF inflows continue to provide institutional support.

Gold: BlackRock’s Evy Hambro projects gold could surpass $4,200 as paper currencies are repriced against real assets. Bank of America forecasts gold at $5,000 and silver at $65 by 2026, citing fiscal deficits, investor demand, and structural trends favoring real assets, despite short-term consolidation risks.

Nikkei 225: Asia-Pacific markets opened higher on Wednesday, with Japan’s Nikkei 225 up 0.3%, even as renewed U.S.-China trade tensions and threats of “retribution” from President Trump kept volatility elevated.