Bitcoin's Longest Losing Streak Ends, Liquidity Hints Bottom → Markets

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Briefing

Bitcoin recently endured its longest losing streak since 2024, marked by a significant 23% monthly price drop and a 33% decline in the total crypto market capitalization since early October. This downturn saw over $1 billion in futures liquidations, indicating widespread forced selling. However, a crucial liquidity signal → the spot bid-ask delta at 10% depth → has surged to its second-highest level of 2025, historically preceding market bottoms and suggesting that buyers are now actively entering the market.

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Context

Before this recent market event, many investors were questioning the crypto market’s resilience amidst macroeconomic uncertainties. There was a general concern about whether the recent price declines were just a temporary dip or the start of a more prolonged downturn, especially with ongoing discussions around central bank policies and their impact on risk assets.

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Analysis

Bitcoin’s sharp decline and extended losing streak were primarily driven by sustained outflows from Bitcoin spot Exchange-Traded Funds (ETFs) and a broader risk-off sentiment in the digital asset markets. Think of it like a crowded theater where many people suddenly decide to leave at once; the exits become jammed, and prices (in this case, asset values) drop quickly as everyone tries to sell. This selling pressure was exacerbated by over $1 billion in futures liquidations, which are forced closures of leveraged trading positions when prices move against traders. Despite this, the market is showing early signs of stabilization.

A key on-chain metric, the spot bid-ask delta, indicates that buyers are now stepping in, suggesting a potential floor is forming. This dynamic is further supported by increasing expectations of a U.S. Federal Reserve interest rate cut in December, which typically makes risk assets like Bitcoin more attractive.

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Parameters

Monthly Drawdown → Bitcoin experienced a 23% monthly price decline, marking its steepest drop since June 2022.
Total Market Cap Drop → The overall crypto market capitalization decreased by 33%, falling from $4.2 trillion to $2.8 trillion since early October.
Futures Liquidations → Over $1 billion in futures positions were liquidated, indicating significant forced selling.
Liquidity Signal → The spot bid-ask delta at 10% depth reached its second-highest level of 2025, signaling increased buyer activity.
Fed Rate Cut Odds → Market expectations for a December Federal Reserve interest rate cut have surged above 70%.

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Outlook

In the coming days and weeks, watch for Bitcoin to consolidate within the $80,000 to $88,000 range. The critical factor will be whether the liquidity conditions continue to improve and if Bitcoin spot ETF flows stabilize or reverse their recent outflow trend. If the positive liquidity indicator continues to strengthen, it could signal the start of a rally towards $100,000 or higher by early 2026. Conversely, a failure to stabilize could see Bitcoin test lower support levels around $70,000.

Bitcoin’s recent sharp decline, while painful, is showing early signs of a potential market bottom as buyers emerge and macro conditions hint at future easing.

Signal Acquired from → binance.com