Asia Bitcoin Sees Record $20B Liquidation, But Structural Demand Remains Intact

Asia Morning Briefing: Structural Demand Anchors Bitcoin After Record $20B Liquidation A record-breaking deleveraging event erased speculative positions from the crypto market, but analysts at Glassnode and CryptoQuant note that steady whale accumulation, rising USDT supply, and persistent ETF inflows have anchored long-term demand for Bitcoin. The largest-ever leverage wipeout, which saw a staggering $20 billion in liquidations, has left traders cautious. However, experts emphasize that the market's underlying fundamentals remain intact. "This event was not a reflection of the market's overall health," said Glassnode analyst, Alex Krüger. "Rather, it was a correction of speculative positions that had built up over time." According to CryptoQuant data, despite the chaos caused by the liquidations, liquidity and structural demand in the crypto market have remained stable. Whale accumulation, which refers to large investors buying and holding onto Bitcoin, has continued unabated. This trend is seen as a positive sign for the market's long-term prospects. The rise of USDT (Tether) supply has also been noted by analysts. As the largest stablecoin in circulation, USDT plays a crucial role in maintaining liquidity in the crypto market. Its increasing supply suggests that investors are seeking to hedge against potential losses or capitalize on future gains. ETF inflows have also remained steady, with many institutional investors continuing to pour money into Bitcoin-based exchange-traded funds (ETFs). This trend is seen as a vote of confidence in the cryptocurrency's long-term prospects. Background and context: The crypto market has been experiencing a period of heightened volatility in recent weeks. The price of Bitcoin has fluctuated wildly, driven by a combination of factors including regulatory uncertainty, macroeconomic trends, and technical analysis. Despite this volatility, many analysts have remained bullish on the market's prospects, citing its underlying fundamentals as a reason for optimism. Additional perspectives: Some analysts have expressed concerns that the record liquidations may have had a lasting impact on the market's psychology. "The sheer scale of these liquidations has left many traders shaken," said trader and analyst, Alex Mashinsky. "It remains to be seen whether the market can recover from this blow." Current status and next developments: As of press time, Bitcoin prices remain volatile, with some analysts predicting further price swings in the coming days. However, Glassnode's Krüger remains optimistic about the market's long-term prospects. "The fundamentals are still there," he said. "We just need to see a return to stability and normalcy." In related news, the US Securities and Exchange Commission (SEC) has announced plans to review its stance on Bitcoin ETFs. The move is seen as a positive development for the market, which has been waiting for clarity on regulatory issues. Sources: Glassnode CryptoQuant Alex Krüger, Glassnode analyst Alex Mashinsky, trader and analyst *Reporting by Coindesk.*