Bitcoin’s sharp downturn is resetting overstretched leverage, clearing the way for stronger structural momentum as markets shake out excess risk and position for renewed confidence amid enduring digital-asset resilience and optimism across AI and tech.
Crypto Shakeout Resets Market Dynamics
A sweeping shakeout in leveraged crypto positions is pressuring global risk sentiment as liquidations cascade across exchanges. Devere Group CEO Nigel Green shared on Nov. 18 that ’s $1 trillion downturn stems from an aggressive unwinding of borrowed bets rather than any fracture in its long-term investment case.
“This is leverage being cleared out. When traders borrow heavily to magnify positions, any reversal triggers liquidations that accelerate the move,” he said, emphasizing: “The long-term case for , among other major digital assets, remains intact.” Green highlighted that the broader macro environment is amplifying volatility, stating: “People are worried about jobs, about whether the AI and tech surge can keep its pace, about tariffs, and about upcoming Fed policy decisions.” He added that these pressures influence sentiment but don’t alter foundational trends:
These concerns are shaping sentiment, but they don’t alter the structural trajectory for and/or standout AI and tech opportunities.
His analysis pointed to how leverage cycles regularly distort short-term price dynamics.
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Devere Group’s view is that the market now reflects precaution rather than eroded fundamentals, as traders unwind risk exposure. Referencing past episodes to emphasize the resilience of recovery patterns, he commented: “History teaches us that these phases have reversed faster than expected once the pressure points begin to ease. When fear dominates and leverage unwinds, the foundations of the next recovery, typically, start to appear.”
The executive expects confidence to return swiftly once borrowing excesses are removed. “Investors are waiting for a broader improvement in confidence. Confidence tends to rebuild rapidly when the excess leverage is out of the system,” Green detailed. He concluded:
Sentiment can turn quickly. Currently, markets need greater confidence from investors as a whole, and that confidence is likely to return once the major concerns lift.
Supporters of digital assets argue that such deleveraging phases often strengthen the market’s structural footing and set conditions for more sustainable future gains.
FAQ ⏰
- What caused bitcoin’s $1 trillion downturn? The decline was driven by an aggressive unwinding of leveraged positions rather than any breakdown in long-term fundamentals, according to Devere CEO Nigel Green.
- How is the macro environment affecting crypto volatility? Concerns around labor markets, tech momentum, tariffs, and monetary policy are amplifying short-term swings in sentiment.
- Why do analysts say leverage cycles distort crypto prices? Heavy borrowing accelerates liquidations during reversals, creating exaggerated short-term price moves that don’t reflect structural trends.
- How can deleveraging strengthen the crypto market? Removing excess leverage often restores stability and sets a foundation for more sustainable long-term growth.
Author: Kevin Helms
Source: Bitcoin
Reviewed By: Editorial Team
