Binance Research, a firm specializing in cryptocurrency analytics, has highlighted that Bitcoin’s ($BTC) leverage ratio data might be signaling the emergence of a short-term market bottom.
The research team shared on social media that Bitcoin’s leverage ratio has climbed to its highest point since November of last year. This rise was largely passive, caused by the price dropping more rapidly than active deleveraging could keep pace with. Analysts interpret this as an indication that the market is nearing a peak stress level, suggesting that as deleveraging slows and liquidity returns, a short-term bottom may form.
Last week saw global markets undergo what Binance Research described as a “lesson-like” V-shaped recovery. Markets quickly oscillated between sharp sell-offs driven by policy changes and renewed risk appetite. The US Supreme Court’s decision to overturn tariffs imposed during the Trump administration under IEEPA briefly unsettled investors, pushing Bitcoin just below $62,000. Nevertheless, this selling pressure was counterbalanced by encouraging developments in artificial intelligence.
Specifically, Anthropic announced significant corporate partnerships which were soon followed by NVIDIA reporting strong fourth-quarter earnings. These results reinforced confidence in tech stocks and confirmed NVIDIA’s commitment to investing heavily in AI infrastructure—allowing Bitcoin to challenge the $69,000 mark. Later in the week, AMD revealed a multi-billion-dollar AI hardware and stock agreement with Meta Technologies Inc., further bolstering optimism within technology sectors.
The analysis points out that institutional ownership now treats cryptocurrencies not merely as monetary tools but rather as asset classes highly sensitive (high beta) to movements within technology stocks.
The report also notes how recent steep declines in tech equities have negatively impacted crypto markets too. Market worries about AI compressing software profit margins alongside planned capital expenditures worth $600–700 billion for 2026—and uncertainty over whether demand for AI will be cyclical—have created considerable tension across financial markets.
Additionally, Binance Research observed an unusual weakening of Bitcoin’s historical correlation with global M2 money supply measures lately. With anticipated approval of US-based Bitcoin ETFs slated for 2024 altering $BTC‘s ownership structure among institutions—which now categorize it alongside tech equities—the coin exhibits stronger ties with technology stocks than traditional liquidity indicators do currently. Moreover, elevated real interest rates are causing funds expected to flow into risky assets instead remain parked within money market instruments.
Despite ongoing macroeconomic uncertainties, certain on-chain metrics and derivatives data hint at potential bottom formation signals. For instance, Bitcoin’s 90-day realized profit/loss ratio dipping below one—the first occurrence since 2023—suggests net realized losses consistent historically with capitulation phases during bear markets.
While seeing leverage hit its highest level since November might initially appear risky, Binance Research explains this often marks intense selling climax stages. Leverage rises passively when prices decline faster than traders actively close positions. Once such phases conclude, a rebuilding period characterized by increased liquidity typically follows.
An additional noteworthy observation is the options market’s 25-delta skew index reaching levels unseen since November 2022 amid FTX’s collapse.
However, lacking any comparable large-scale negative catalysts today suggests current defensive positioning may be overly cautious or excessive.
Lately released Q4 institutional filings (13F reports) show approximately net outflows equivalent to around 25 thousand $BTC from ETFs.
Digging deeper reveals most sales originated from high-net-worth individuals,
family offices,
and smaller investment advisors,
while governments,
holding companies,
and private equity firms acted as net buyers.
This divergence implies long-term capital remains committed despite volatility prompting shorter-term investors sensitive to price swings to reduce exposure.
A sustained recovery among software &&&&; technology shares could ease one major macroeconomic headwind currently pressuring cryptocurrency valuations according to Binance Research analysts.**This is not investment advice.*