The crypto market entered the third quarter without the previous overheating, but also without strong support from buyers. After the sell-off in the second quarter, some leveraged positions were closed, but at the same time, the market became thinner.
This is an important combination. There are fewer forced sales, but large orders can now move the price more significantly. The market has been cleared, but it has not become more stable.
Some Leverage Disappeared After the Sell-Off
Diagram of returns of various assets
In the second quarter, there was a large wave of liquidations on long positions in bitcoin and Ethereum. According to Talos, their total volume reached $8.35 billion.
Such a flush removed some speculative risk. When traders use less borrowed funds, price drops less often trigger a chain reaction of automatic closures.
But a cleansed market is not always a strong market. If liquidity leaves along with leverage, the price becomes more sensitive to any new pressure.
The Derivatives Market Cooled Sharply
For bitcoin, the volume of open futures and options positions dropped to $33.5 billion. This is about a third below the second quarter peak. For Ethereum, the decline was even more pronounced. The figure fell to $16.2 billion, losing about 40% from the peak.
For the market, this is a double signal. On one hand, there is less risk of cascading liquidations. On the other, there is less activity and less capital ready to support movement.
BTC Is Testing Lower Levels Again
Amid weak demand, bitcoin fell to $57,742. This is the lowest level since September 2024.
Later, the price returned closer to $58,600, but there is still no clear reversal. The market is more likely trying to find equilibrium after a strong sell-off than showing a recovery.
With few orders near the price, even moderate selling can quickly bring back pressure. Therefore, the current stabilization looks fragile.
Order Books Have Become Thinner
The main problem now is market depth. At the beginning of May, there were about $70 million in orders within 2% of the bitcoin price.
By the end of June, this figure had dropped to about $35–40 million. That is, the liquidity buffer near the market price has almost halved.
For traders, this means stronger slippage. A large deal moves the price faster, and volatility can increase even without major news.
Trading Activity Also Fell
The decline is visible not only in derivatives. Spot volumes fell by 28% for the quarter, totaling $2.32 trillion.
This worsens the picture. If only leverage were falling, the market could look healthier. But when volumes, depth, and demand all decline at once, recovery becomes less reliable.
That is why the third quarter begins without the previous margin of safety. There are fewer participants, fewer orders, and the price remains near sensitive levels.
ETFs Have Become a Source of Pressure
American spot bitcoin funds stopped being strong support in the second quarter. On June 25, $696.3 million flowed out of them in one day.
For the whole of June, net outflow totaled about $4.5 billion. Since the beginning of the year, the figure has reached about $5.5 billion.
For BTC, this is a painful shift. Previously, ETFs were seen as a channel of constant institutional demand. Now this channel itself is creating pressure on the price.
Strategy Purchases Slowed Sharply
Another support factor has weakened. In June, Strategy bought about 3,600 BTC. This is much less than in previous months. In May, the company acquired about 25,000 BTC, and in April — more than 50,000 BTC.
The difference is important not only quantitatively. The market was used to seeing Strategy as a constant buyer. Now this image has become less clear-cut.
Large Reserve No Longer Works as a Shield
By the end of June, the company held 847,363 BTC. The average purchase price was $64,103 per coin. When the market is below this mark, investors start to view the reserve differently.
It is still the largest corporate bitcoin position among public companies, but it is no longer seen only as a support factor.
The pace of accumulation has slowed. In addition, the company previously sold 32 BTC. The volume is small but symbolic: the market saw that the strategy can become more flexible.
Stablecoins Are Not Adding Fuel
Talos also pointed to a reduction in stablecoin supply. For the crypto market, this is an important indicator of internal liquidity.
When there are more stablecoins, traders have more free capital for quick purchases. When their supply decreases, the market loses some fuel. Against the backdrop of ETF outflows and weak purchases by large corporate holders, this makes the start of the quarter more difficult.
Why the Market Has Become Vulnerable
Now the risk looks different than during overheated growth. Then, the main threat was highly leveraged futures and chain liquidations.
Now the problem is different. The market is less saturated with orders. Therefore, even without mass position closures, the price can sharply fall if a large seller appears. This is a subtle but important difference. There is less leverage, but also less of a buffer.
What Can Restore Stability
- The first signal is a stop to ETF outflows. If funds start attracting capital again, the market will get a clear source of demand.
- The second is growth in spot volumes. Without real buying, any rebounds can quickly fade.
- The third is the restoration of order book depth. The more orders near the price, the easier it is for the market to withstand large trades without sharp drops.
What Can Deepen the Drop
The negative scenario is also clear. If ETFs continue to lose capital, Strategy does not return to large purchases, and stablecoin liquidity remains weak, sellers will gain the advantage.
A thin order book is especially dangerous. With such a structure, the price can quickly drop not because of panic, but due to a lack of counter orders. Therefore, in the third quarter, not only news is important, but also the market microstructure. Right now, it looks weaker than in the spring.
What's Next?
The crypto market started the quarter without the previous excess leverage. This reduces the risk of an instant chain sell-off and makes the market less overheated.
But at the same time, some liquidity has left. Order book depth has decreased, spot volumes have dropped, funds are seeing outflows, and large corporate purchases have become noticeably smaller.
The main conclusion is simple. After the second quarter, the market has become lighter, but not stronger. There is less borrowed risk, but also fewer buyers near the price. Therefore, bitcoin and Ethereum can move sharply even without a major external shock.
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