 
 
Bitcoin is flashing bearish signals as its market capitalization slips into a zone associated with aggressive downside.
According to Aphractal CEO João Wedson, Bitcoin’s current market cap suggests mounting risk, with further declines over the coming weeks potentially triggering a broader capitulation event.
Wedson warns that bullish participants may need to act decisively to prevent sentiment from deteriorating further.
Structural shifts in derivatives activity reinforce this caution. Data from perpetual futures markets show a sharp contraction in Bitcoin trading across exchanges.
Moreso, Aphractal revealed that between August and November, Bitcoin recorded the most intense period of leveraged trading in its history, with as many as 19 exchanges posting daily volumes of up to 80 million trades. That activity has since collapsed.
 
Now, the seven-day average is near 13 million trades, reflecting a dramatic pullback in leverage and speculative participation.
Meanwhile, ETH also experienced a surge in trading activity earlier in 2025, though recent figures are elevated.
This shift emerged after the major liquidation event in October, which has made market participants significantly more cautious toward Bitcoin and leverage overall.
The fallout is evident in what analysts describe as the largest open interest drawdown in Bitcoin’s history, signalling a prolonged reset phase before institutional and whale interest fully returns.
That said, CoinMarketCap data shows Bitcoin slipped 0.55% over the past 24 hours to around $87,405, underperforming the broader crypto market.
ETF outflows in the hundreds of millions weekly, miner selling pressure, and bearish technical structures continue to weigh on near-term performance, even as mining difficulty reaches record highs ahead of the 2026 halving.
Despite the gloomy short-term outlook, longer-term optimism is intact. Bitwise Chief Investment Officer Matt Hougan argues that structural forces now outweigh the traditional four-year cycle, which he considers effectively obsolete.
Hougan expects steady, lower-volatility gains rather than explosive rallies, emphasising that institutional adoption is still in its early stages.
With major wire houses only recently approving Bitcoin products and allocation decisions moving slowly, the Bitwise CIO believes these gradual inflows could support a higher market next year.