Binance Releases Comprehensive Report on the Current State of Bitcoin: “The Bottom May Have Been Reached”

Cryptocurrency analytics company Binance Research stated that leverage ratio data for Bitcoin ($BTC) may indicate the formation of a short-term bottom.

According to the institution’s assessment shared on social media, Bitcoin’s leverage ratio has reached its highest level since November last year. It was noted that a passive increase in leverage occurred because the price decline happened faster than the active deleveraging process. Analysts stated that this indicates the market is approaching a stress peak, and that a short-term bottom could form as the deleveraging process slows and liquidity intensifies again.

According to Binance Research, global markets exhibited a “lesson-like” V-shaped recovery last week, rapidly switching between periods of sharp policy-driven sell-offs and strong risk appetite. The US Supreme Court’s decision to overturn tariffs imposed by the Trump administration under the IEEPA created brief uncertainty, pushing Bitcoin just below $62,000. However, the selling pressure was offset by positive developments in the field of artificial intelligence.

In particular, Anthropic’s announcement of large-scale corporate partnerships, followed by NVIDIA’s strong fourth-quarter financial results, boosted confidence in technology stocks. NVIDIA’s balance sheet confirmed the sustainability of capital expenditures towards AI infrastructure, enabling Bitcoin to test the $69,000 level. Towards the end of the week, AMD’s announcement of a multi-billion dollar AI hardware and stock deal with Meta further reinforced the positive sentiment in the technology sector.

According to the analysis, in the current institutional ownership structure, crypto assets are no longer treated solely as a monetary instrument, but as an asset class with high beta sensitivity to the technology sector.

The report states that the sharp repricing seen recently in technology stocks has also dragged down the crypto market. Concerns that AI will put pressure on software margins, the $600–700 billion in capital expenditures planned by major companies for 2026, and questions about whether the demand for AI is cyclical have created significant stress in the markets.

Binance Research also noted that the historical correlation between Bitcoin and the global M2 money supply has recently deteriorated unusually. With the approval of Bitcoin ETFs in the US in 2024, the ownership structure of $BTC changed, and it is now classified under the same risk factor as technology stocks in institutional portfolios. Therefore, Bitcoin now shows a higher correlation with technology stocks than with liquidity indicators. The high real interest rate environment is also causing liquidity, which would otherwise be expected to flow into risky assets, to remain in money market funds.

Despite macroeconomic uncertainties, some on-chain and derivative indicators may be pointing to a bottom formation. Bitcoin’s 90-day realized profit/loss ratio falling below 1 for the first time since 2023 suggests a period of net realized loss in the market, historically coinciding with capitulation phases.

Furthermore, while leverage reaching its highest level since November might seem like an increase in risk at first glance, according to Binance Research, this often signals the most intense phase of selling. Leverage passively increases when prices fall faster than active position closures, and once this phase is complete, the market typically enters a liquidity rebuilding phase.

It is also noteworthy that the 25-delta skew index in the options market has reached its highest level since November 2022, when FTX experienced its downturn. However, the absence of a similarly large intra-sector negative catalyst in the current period suggests that the defensive positioning may have been excessive.

According to recent 13F reports, there was a net institutional outflow of approximately 25,000 $BTC equivalent from ETFs in the fourth quarter. However, a closer look at the breakdown reveals that the majority of sales came from high-net-worth individuals, family offices, and smaller investment advisors. Conversely, governments, holding companies, and private equity funds were net buyers.

Binance Research notes that this divergence indicates that long-term capital remains in the market, while short-term and price-sensitive investors react to volatility. According to the institution, a sustained bottom in software and technology stocks could alleviate one of the biggest macroeconomic pressures on the crypto market.

*This is not investment advice.