Bitcoin’s sharp decline resets excess leverage and paves the way for stronger structural momentum as the market sheds excess risk and positioning and gains a new sense of confidence amid continued resilience in digital assets and optimism across AI and technology.
Cryptocurrency shakeout resets market trends
A large-scale weeding out of leveraged crypto positions is weighing on global risk sentiment as liquidations cascade across exchanges. DeVere Group CEO Nigel Green said on November 18 that Bitcoin's $1 trillion decline was due to the aggressive unwinding of borrowed bets, rather than the failure of long-term investments.
“This is deleveraging. As traders borrow heavily to expand their positions, any reversal will trigger liquidations and accelerate the movement,” he said, stressing that “the long-term case for Bitcoin, among other major digital assets, remains intact.” Greene emphasized that the broader macro environment is amplifying volatility, saying, “People are worried about jobs, whether the proliferation of AI and technology can keep its pace, tariffs, and future Fed policy decisions.” He added that while these pressures have an impact on sentiment, they do not change fundamental trends.
While these concerns are shaping sentiment, they do not change the structural trajectory of Bitcoin or the outstanding AI and technology opportunities.
His analysis pointed out how leverage cycles regularly distort short-term price trends.
read more: Yes, Bitcoin is falling, but “the fall is over,” says Standard Chartered.
In De Vere Group's view, markets are now reflecting precautionary measures rather than erosion of fundamentals as traders unwind their risk exposures. Citing past episodes and underscoring the resilience of the recovery pattern, he commented: “History teaches us that once pressure points start to ease, these phases are reversed sooner than expected. Once fear reigns and leverage loosens, the foundations for the next recovery usually begin to emerge.”
Management expects confidence to recover quickly once excessive borrowing is resolved. “Investors are waiting for a broader improvement in confidence. When excessive leverage comes out of the system, confidence tends to recover quickly,” Green elaborated. He concluded:
Emotions change quickly. The market needs more confidence from investors across the board right now, and that confidence is likely to return once major concerns are resolved.
Proponents of digital assets argue that this phase of deleveraging often strengthens the market's structural foundations and creates conditions for more sustainable future returns.
FAQ ⏰
- What caused Bitcoin's $1 trillion drop?
DeVere CEO Nigel Green said the decline was due to aggressive unwinding of leveraged positions rather than a collapse in long-term fundamentals. - How does the macro environment affect cryptocurrency volatility?
Concerns over the labor market, technology momentum, tariffs, and monetary policy are amplifying short-term swings in sentiment. - Why do analysts say leverage cycles distort crypto prices?
Large borrowings accelerate liquidation during reversals, creating exaggerated short-term price movements that do not reflect structural trends. - How can deleveraging strengthen the crypto market?
Removing excessive leverage often restores stability and establishes a foundation for more sustainable long-term growth.
