Are there any indicators that suggest a potential rebound for Bitcoin in the near future?

3 Key Reasons Behind Bitcoin and Risk Market Sell-Off: Is a Recovery on the Horizon?

Bitcoin’s latest drawdown has cascaded across crypto and broader risk markets, pushing volatility higher and risk appetite lower. While headlines often point to a single trigger, sell-offs at this stage of the cycle tend to be multi-factor events. Below are the three primary drivers behind the move, how they interact, and what on-chain and macro signals could flag a durable recovery.

1) Macro Liquidity Squeeze and Higher Real Yields

Crypto trades as a high-beta asset to global liquidity. When financial conditions tighten, risk premiums rise and long-duration assets-tech stocks and Bitcoin included-reprice lower.

Why macro is pressuring Bitcoin

• Rising or sticky real yields: Higher inflation-adjusted yields increase the opportunity cost of holding non-yielding assets like BTC.
• Dollar strength (DXY): A stronger USD tightens global dollar liquidity and typically coincides with weaker BTC performance.
• Quantitative tightening and fiscal flows: Balance sheet runoff, Treasury issuance, and swings in the Treasury General Account (TGA) can drain liquidity from risk assets.
• Event risk: Geopolitical shocks and policy uncertainty push investors into cash and short-duration instruments.

What to monitor

• 10-year real yields: A rollover often precedes renewed risk-taking.
• DXY trend: Dollar weakness tends to relieve pressure on BTC.
• Financial-conditions indexes and central-bank balance sheets: Looser conditions support beta.

2) Leverage, Market Structure, and Liquidation Cascades

Leveraged positioning amplifies moves both ways. When price starts to slip, forced deleveraging in derivatives can turn a routine dip into a sharp flush.

The liquidation loop in crypto

1. Elevated open interest (OI) builds in perpetuals and futures; funding skews positive.
2. Price dips trigger long liquidations, widening spreads and thinning order books.
3. More stops are hit as volatility spikes; basis compresses; market makers pull quotes.
4. Options flows (gamma) can reinforce momentum until leverage resets.

Healthy reset signals

• OI-to-market-cap ratio normalizes to mid-cycle ranges after a sharp purge.
• Funding turns flat/negative, then stabilizes near neutral.
• Spot leads perps (spot premium) and depth returns to top-of-book liquidity.

3) Crypto-Native Flows: ETF Rotations, Miner Supply, and Stablecoin Liquidity

Beyond macro and leverage, crypto-specific flows have been pivotal since 2024.

Spot ETF flow dynamics

• Spot Bitcoin ETFs (approved in 2024) created a structural spot bid-but flows can swing. Net outflows or large redemptions translate to real sell pressure on underlying BTC.
• Rotation among issuers, fee changes, and tax-loss harvesting windows can produce lumpier flows around month- and quarter-end.
• Spot Ether ETFs (launched in 2024) add a second institutional on-ramp, influencing cross-asset rotation between BTC and ETH.

Miner behavior post-halving

• After the April 2024 halving, hashprice fell while energy costs stayed elevated. Some miners periodically sell treasuries to fund operations and capex.
• Difficulty adjustments and transaction-fee regimes (e.g., periods of low L2/ordinals/inscription activity) affect miner revenues and sell pressure.

Stablecoin supply as a liquidity gauge

• Rising aggregate stablecoin market cap typically precedes higher spot demand and risk appetite.
• Contractions suggest sidelined capital or exits to fiat-often coinciding with crypto drawdowns.

On-chain risk/valuation checkpoints

• SOPR below 1 and trending up: Losses being realized but selling pressure absorbed.
• MVRV cooling toward long-term averages: Excess froth deflates, resetting the base.
• Long-term holder spending spikes that quickly fade: Capitulation followed by re-accumulation.

Is a Recovery on the Horizon?

A durable rebound typically requires both a macro and micro reset. The macro side hinges on easier financial conditions-either via cooling real yields, a softer dollar, or clearer policy guidance. The crypto-native side needs positioning to clear and spot demand to return.

Checklist for a higher-conviction bottom

• ETF flows: Multiple sessions of net inflows into spot BTC (and ETH) funds.
• Derivatives: OI reduced versus market cap, funding neutral, basis modestly positive.
• Spot-led bounces: Rising volumes on spot exchanges leading perps.
• Stablecoin growth: Broad-based expansion across USDT, USDC, FDUSD, and EUR/Asia stables.
• On-chain: SOPR sustainably > 1, LTH selling pressure abating, exchange balances drifting lower.
• Cross-asset: Tech breadth stabilizing; volatility indices (e.g., VIX/VVIX) cooling.

Bottom Line

The sell-off is best explained by a confluence of tighter global liquidity, leveraged positioning, and shifting crypto-native flows. Recoveries in this regime tend to be stair-stepped: first a leverage flush, then stabilization in macro, followed by renewed spot demand via ETFs and stablecoin inflows. Keep your focus on real yields and the dollar, derivatives cleanup, and the return of consistent spot bids-these are the telltales that the next leg higher is building.