According to 528btc, the cryptocurrency market in late 2025 experienced extreme volatility, marked by sharp price drops, liquidation waves, and significant adjustments in open interest. Bitcoin’s open interest fell by $2.06 billion (-6.1%), while Ethereum’s dropped $480 million (-2.5%). This systemic deleveraging forced retail and institutional investors to close positions after months of aggressive speculation. Following the liquidation wave, market volatility normalized, with Bitcoin’s actual volatility dropping to 48.4% and Ethereum’s to 67.8%. Institutional inflows, including a $254.5 million fund inflow into Bitcoin ETFs led by Fidelity, signaled renewed interest in crypto as a viable asset class. Meanwhile, altcoins remain fragile, with high long/short position ratios on Solana and XRP posing risks of cascading liquidations if key support levels break. Regulatory uncertainty, particularly around MSCI’s potential reclassification of digital asset managers (DAT), adds further caution to the market. Traders are advised to take advantage of volatility arbitrage, gamma exposure shifts, and normalized funding rates as the market transitions into a more balanced phase.
Crypto Liquidation and Market Volatility: BTC and ETH Rebalancing Opportunities Emerge
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