Emre Yumlu 
After one of the most turbulent weeks in the crypto market, Bitcoin is showing strong signs of recovery. On-chain indicators suggest that the recent crash might have created the foundation for a healthier and more sustainable upward move.
Major Correction and On-Chain Signals of a Reset on Bitcoin and Crypto
During Friday’s market-wide sell-off, Bitcoin experienced one of its steepest corrections of the year. The price dropped from around $126,000 to $102,000, while open interest in the futures market plunged from $47 billion to $35 billion — a $12 billion decline that triggered a wave of liquidations across leveraged positions.
By the weekend, however, buyers began stepping back in, driving BTC up to roughly $115,000, marking a daily gain of more than 3%. According to CryptoQuant data, funding rates, which had turned sharply negative during the sell-off, have since rebounded to slightly positive levels — a sign that market sentiment is stabilizing and overly bearish bets are being unwound.
Leverage Flush and Market Stabilization
Bitcoin’s Estimated Leverage Ratio (ELR) has fallen to its lowest level since August, indicating that excessive leverage has been cleared from the system. This broad deleveraging could help prevent further large-scale liquidations and promote a more stable trading environment.
Meanwhile, the Stablecoin Supply Ratio (SSR) has dropped to its lowest level since April, suggesting that more stablecoin liquidity is sitting on the sidelines — capital that could potentially re-enter the market once investor confidence strengthens.
Investor Confidence and Strong Capital Inflows
Despite recent volatility, digital asset investment products attracted $3.17 billion in inflows last week, with Bitcoin leading the way at $2.67 billion. Ethereum followed with $338 million, while Solana and XRP saw $93.3 million and $61.6 million, respectively.
Trading volumes also surged, with weekly activity reaching $53 billion and Friday’s daily volume hitting a record $15.3 billion. These figures highlight that, despite short-term turbulence, investors remain confident in Bitcoin and the broader crypto market’s long-term potential.
This article does not constitute investment advice.
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