O, the nobleman of digital coins, now doth tread the path of sorrow! Behold, the market’s grand ballet of resets, where Bitcoin, that fickle lover, doth undergo a most brutal deleveraging. Yet, alas, the bottom remaineth a phantom, eluding even the most ardent of speculators!
Lo, the wise CryptoQuant doth declare: the open interest, that fickle companion, doth wane, and the CME’s basis, a sly trickster, doth compress, heralding a time of reckoning. Verily, the market’s heart groweth cold, yet the capitulation’s shadow looms not yet!
O, Woe! The CME’s Whispering Curve
The CME’s yield curve, that cunning fox, doth reflect the demand for leveraged longs, now in a downward spiral since yon year 2025. A pattern most familiar, akin to the 2019 and 2022 bear markets, yet the slope doth remain positive, a stubborn mule! Though the curve’s descent signalth waning leverage and risk, the true capitulation, that final scream, hath not yet arrived. A gradual deleveraging, but not the grand finale!
The yield curve’s compression, that sly serpent, doth whisper of weaker demand for leveraged longs, as the market’s heart groweth less eager to pay a premium. A sign of faltering bullishness, a bearish backdrop, yet the longer-dated contracts, those proud stallions, still gallop ahead of the spot and short-dated futures. A paradox, indeed!
Thus, the curve doth paint a picture of a market where price rallies, those fleeting dreams, face resistance until the cyclical bottom, that elusive maiden, doth appear. For in the past, the bottom was only found when the yield curve’s slope turned negative, a sign of backwardation and acute deleveraging. Hence, Bitcoin’s journey downward hath yet many miles to go!
The Cyclical Bottom: A Hopeful Mirage?
Behold, the decline in futures open interest, that most telling of signs! It hath plummeted from its 2025 zenith, a trend most akin to the 2022 bear market. Verily, the CryptoQuant doth confirm a 47% drop, mirroring the 45% plunge of yore. A major unwind of leveraged positions, a period of increased participation now met with liquidation’s cruel embrace, reduced speculation, and diminished hedging-confirming an ongoing deleveraging cycle!
The combination of a falling open interest and a positive yield curve, that most curious of duos, doth suggest a consolidative regime, a mid-cycle bearishness, with the definitive capitulation, that final act, nigh at hand. O, what a thrilling drama this market doth present!
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2026-02-28 14:21