Bull returns quickly! Bitcoin rebound signals are strong, aiming for the $100,000 mark after leverage cleaning.

Bitcoin rebounded strongly after falling to its lowest point since April on November 20, regaining the $90,000 mark. During this period, the market's open contracts plummeted from $45 billion to $28 billion, clearing a large amount of excessive leverage. The United States Spot Bitcoin ETF saw a reflow of $151 million in funds starting from November 21 after several days of net outflow, with the short-term holder profit and loss ratio rising to 1.066, indicating active profit-taking. Analysts believe that if the selling pressure from retail investors eases and institutional funds continue to get on board, Bitcoin is likely to challenge the critical psychological level of $100,000 again in the near future.

Leverage Reset Completed and Market Health Assessment

The recent cleansing experienced by Bitcoin is considered one of the most significant leverage reset events in the current cycle. According to CryptoQuant data, the scale of open contracts plummeted from $45 billion to $28 billion, a decline of nearly 38%. This process cleared excessive long positions in the market, laying a solid foundation for a healthy rise thereafter. The normalization of leverage not only reduced systemic risk but also made the market structure more robust, avoiding a death spiral that could be triggered by a series of liquidations.

(Source: CryptoQuant)

During this process, CryptoQuant's active buy/sell ratio recorded 1.06, indicating that even after a significant market adjustment, the buying volume still dominates. This indicator, when diverging from price trends, is usually seen as a leading signal for a short-term rebound, especially after panic selling. Historically, similar leverage washouts often lead to technical rebounds, and the depth and breadth of this adjustment align with this pattern.

The Fear and Greed Index fell to an extreme fear level of 12 on November 20, which typically corresponds to market bottom areas. From a behavioral finance perspective, when retail investors panic and engage in concentrated dumping, institutional investors often see this as a good opportunity for contrarian positioning. Although the current market sentiment has somewhat repaired, it is still quite a distance from being overly optimistic, leaving ample emotional space for subsequent rebounds.

Key Market Indicators and Data Comparison

Leverage Liquidation Data

• Open Interest: fell from $45 billion to $28 billion
• Decrease ratio: approximately 38%
• Liquidation size: Excess long positions concentrated Close Position

Capital Flow Changes

• November 12-20: ETF net outflow of 3.09 billion USD
• November 19: Only net purchases of 75.4 million USD
• Starting from November 21: Net inflow of 151 million USD

Market Sentiment Indicator

• Fear and Greed Index: once dropped to 12 (Extreme Fear)
• Short-term holder SOPR: 1.066 (profit sell)
• Retail dumping amount: $373.6 million

Strategic Significance of the Turning Point in ETF Capital Flow

At the same time, the shift in funds flow for the U.S. Spot Bitcoin ETF carries significant signaling meaning. From November 12 to 20, the ETF experienced continuous net outflows, totaling $3.16 billion, with only a slight net inflow of $75.4 million on November 19. This ongoing pattern of capital outflow was broken on November 21, when a net inflow of $151 million was recorded, which may signal a turning point in market sentiment.

Historical experience provides valuable references for understanding the current situation. In September 2024, the Bitcoin ETF experienced strong inflows after a similar scale of capital outflow, driving the price from around $53,900 to a historical high of $106,000 in December. Although macro factors such as the U.S. presidential election also played a role at that time, the reversal of capital flows was undoubtedly one of the core driving forces. The current situation has many similarities to that time, particularly as early signs of institutional capital reallocation have already emerged.

Farzam Ehsani, the CEO of VALR exchange, pointed out in an interview that the recent broad inflow of ETF funds may indicate that institutional liquidity is re-entering the digital asset market after several weeks of actively de-risking. He particularly emphasized that the participation of sovereign wealth funds could further strengthen the demand side, as the Czech National Bank and the Luxembourg Sovereign Wealth Fund have publicly disclosed their holdings in Bitcoin ETF positions, providing evidence for this viewpoint.

Retail Investor Behavior Divergence and Market Momentum Transition

Despite signs of institutional funds returning, the retail investor group remains cautious. According to CoinGlass data, the retail investor spot dumping reached $373.6 million, indicating that retail investors chose to reduce their positions on the rebound rather than buying in. This divergence in behavior between institutions and retail investors is not uncommon in Bitcoin's history, typically occurring near significant market turning points.

The continuous exit of short-term holders (those holding for less than 155 days) is worth paying close attention to. An analysis of the Short-Term Holder Spent Output Profit Ratio (STH-SOPR) shows that this indicator is currently in the positive zone at 1.066, indicating that short-term holders are selling at a profit. From a market psychology perspective, profit-taking behavior typically occurs in a bull market environment, rather than during panic selling, which in fact provides healthy liquidity to the market.

If the retail selling pressure can ease, combined with the continuous inflow of institutional funds, Bitcoin will have the conditions to attack the $100,000 mark again. The current price is hovering around $91,450, with key technical resistance levels distributed in the previous high range of $95,000 to $98,000, while the psychological barrier of $100,000 will undoubtedly become the focus of contention between the bulls and bears.

Comprehensive Analysis of Macroeconomic Environment and On-Chain Signals

In addition to technical and capital flow factors, the macroeconomic environment also has a significant impact on Bitcoin's price movements. The expectations of pro-cryptocurrency policies following Trump's election as President of the United States provided additional optimistic sentiment support for the market. The entry of non-traditional cryptocurrency investors, such as sovereign wealth funds, further enriched the sources of capital and reduced the market's dependence on a single type of investor behavior.

From the perspective of on-chain data, the profitable selling by short-term holders, while temporarily suppressing price increases, actually helps to raise the overall cost basis of holdings, creating a more solid support platform for subsequent upward movements. When the costs of newly entering investors are concentrated within a certain range, they tend to prefer holding rather than rushing to take profits, and this change in holding behavior can significantly reduce market dumping pressure.

The volatility indicator also conveys positive signals. Despite experiencing a sharp adjustment, the volatility of Bitcoin has not shown extreme expansion, indicating that the structure of market participants is optimizing, and the increase of institutional investors is making price behavior more rational. From the perspective of the derivatives market, specialized indicators such as options skew show that the market's pricing of upside risks is gradually returning to balance, rather than being overly optimistic.

Key Validation Window for the New Bull Market Journey

Bitcoin has established the basic conditions for a new round of upward trends after completing the necessary leverage cleaning. Institutional funds are getting on board through ETF channels, the public participation of sovereign wealth funds, and the friendly shift in the macroeconomic environment together form multiple favorable factors driving the price upward. However, the degree of confidence restoration among retail investors and the intensity of sustained capital inflows will be key variables determining whether this rebound can successfully challenge the $100,000 mark. For market participants, closely monitoring the trend changes in open contracts and the daily fund flow data of ETFs can better grasp market dynamics than simply tracking price fluctuations. Against the backdrop of the increasingly mature cryptocurrency market, this recovery after adjustment is not only a technical rebound but also a proof of the healthy operation of market mechanisms, laying a solid foundation for a more robust upward trend in the future.