bitcoin buyers remain on sidelines after leverage flushes
Bitcoin (BTC) has recently navigated a turbulent period marked by two significant “leverage flushes” within five days between April 28 and May 2, 2024. These events, typically seen as market cleansings, liquidated over $500 million in leveraged long positions. Yet, instead of sparking a rebound, they left Bitcoin’s price dropping below $57,000, with new Bitcoin buyers largely absent from the market.
More recently, in late October and early November 2026, the crypto asset faced fresh volatility. A record-setting hack on the Binance exchange on October 29, 2026, and an AI-driven tech sector downturn on November 5, 2026, collectively triggered approximately $1.1 billion in liquidations. Despite these repeated purges of speculative excess, Bitcoin buyers have continued to demonstrate significant hesitancy, signaling deeper issues within the market.
Leverage clears, but new demand remains elusive
The cryptocurrency market often anticipates a rebound after substantial leverage flushes. Such events forcibly close overleveraged positions when prices fall, effectively “resetting” the market by removing excessive risk. Historically, this dynamic often precedes a healthier price recovery as speculative froth is cleared.
However, the events of late April and early May 2024 saw Bitcoin briefly touch $56,500 on May 1 before settling around $57,500 on May 2. This lack of an immediate, robust buying response defied typical market expectations.
Open interest in Bitcoin futures contracts, a measure of active positions, plummeted by 20% from a March 2024 peak of $37 billion to $29.5 billion by May 2, 2024.
Then, the situation repeated itself in late 2026. On October 29, the largest hack in crypto’s history hit Binance, initially pushing Bitcoin’s price near $76,200. Just days later, on November 5, an AI-driven tech crash spilled over into crypto markets, leading to significant liquidations and dropping Bitcoin below $74,000. Each incident shed billions in leveraged positions, yet neither catalyzed a strong buying resurgence.
This persistent buyer avoidance has prompted analysts to question the market’s underlying health. Bitget Wallet analysts noted that while the leverage reset cleared “speculative excess,” it has yet to “address the underlying demand problem.” This sentiment underscores a growing concern that the market is grappling with more than just temporary over-leveraging.
Macroeconomic headwinds stifle Bitcoin buyers
A primary factor contributing to the current buyer hesitancy is the prevailing macroeconomic climate, particularly the U.S. Federal Reserve’s interest rate policy. The “higher-for-longer” narrative, which suggests interest rates will remain elevated for an extended period, has made riskier assets like Bitcoin less attractive to investors seeking safer returns.
The Federal Reserve’s hawkish stance, reinforced by comments from Chairman Jerome Powell, has dampened overall market sentiment. Investors are increasingly cautious, preferring to wait out periods of uncertainty rather than commit capital to volatile assets. This risk-off environment naturally weighs on cryptocurrencies, which are often perceived as higher-risk investments.
Markus Thielen, Head of Research at 10x Research, emphasized this point, stating, “The two leverage flushes in the last five days have not attracted new buyers, which is a concern. The market is still digesting the higher-for-longer narrative, and the lack of new catalysts is keeping investors on the sidelines.” This perspective highlights how broader economic policies are directly influencing crypto investment decisions.
Adding to these concerns are ongoing geopolitical tensions around the globe. Such instability typically encourages investors to move away from speculative assets and towards perceived safe havens. This collective macroeconomic pressure creates a difficult environment for cryptocurrency demand to flourish, even after market corrections.
ETF outflows and stablecoin stagnation signal caution
Beyond macroeconomic factors, specific trends within the crypto market itself reveal a significant lack of spot demand. U.S. spot Bitcoin exchange-traded funds (ETFs), once a source of considerable optimism and inflows, have recently experienced a reversal.
On May 1, 2024, these ETFs recorded a substantial $563.7 million in net outflows, signaling a clear shift in institutional investor behavior. BlackRock’s IBIT, typically a strong performer and a bellwether for institutional interest, saw its first day of zero inflows on April 30, 2024, and subsequently experienced outflows. This is a critical indicator that even large institutional players are pulling back.
Looking at data from late 2026, the shift is even more pronounced. September 2026 saw $2.6 billion worth of inflows into ETFs, but this turned into $290 million of net outflows in October. Currently, U.S.
ETF holders are reportedly sitting below their cost basis of $82,000, creating further incentive for them to avoid fresh capital deployment and potentially realize losses. This “underwater” position often means institutional investors will wait for price recovery before re-engaging.
Furthermore, stablecoin supply has remained largely stagnant, hovering around the $305 billion zone. This lack of movement indicates that significant liquidity is sitting idle rather than being deployed into the market to purchase assets like Bitcoin. The combination of ETF outflows and static stablecoin reserves paints a clear picture of reduced buying pressure and a prevailing wait-and-see attitude among investors.
Binance hack’s lingering impact
The fallout from the October 29, 2026, Binance hack continues to cast a long shadow over market confidence. This incident, deemed the largest in crypto history with an estimated $6.3 billion to $6.43 billion stolen, was attributed to the North Korean government-linked hacking unit TraderTraitor (also known as Lazarus Group).
The attackers drained hot wallets across numerous blockchains, showcasing a sophisticated compromise of the exchange’s infrastructure.
While Binance moved swiftly to address the breach, temporarily halting trading and withdrawals, the scale of capital movement post-reopening was striking. The exchange processed $4.65 billion in withdrawals against only $1.01 billion in deposits in under ten hours, resulting in net outflows of approximately $5.8 billion over a 24-hour period.
This mass exodus of funds from a major exchange reflects deep investor apprehension about asset security and platform stability, even if the funds were later replenished by Binance.
Matt Mena, Crypto Research Strategist at 21Shares, observed that while the market “handled the worst of it” with a smaller drawdown than past crises, institutional resilience didn’t translate into retail demand. The hack, despite being contained, contributed to capital leaving or sitting still, demonstrating that even strong infrastructure can’t override investor fear when trust is eroded.
Critical support levels and the path forward
Analysts are now keenly focused on specific price levels that could determine Bitcoin’s near-term trajectory. For 21Shares, the $73,000 mark represents the 200-day moving average, a crucial technical indicator. A sustained break below this level, they suggest, would “reopen the bear-market debate,” potentially ushering in a prolonged downturn.
Bitget analysts echo this sentiment, emphasizing that Bitcoin must hold the $73,000–$74,000 range to maintain any semblance of stability. They warn that a decisive break below $73,000 could expose the next support level at $68,000. Should $68,000 also fail to hold, it would imply that the current sell-off is more than a temporary leverage flush, hinting at a more structural and fundamental breakdown in demand.
Reclaiming and holding the $80,000 level would signal stronger demand, according to Bitget. Furthermore, getting back above $81,000 to $82,000 would finally put the largest cohorts of ETF holders back into profit. These price points represent significant psychological and financial barriers for current investors, and their breach could inspire renewed confidence and buying activity.
However, analysts are aligned on what won’t be enough for a durable recovery: “macro relief without demand.” A durable Bitcoin recovery, Bitget asserts, “will depend on improving liquidity and Spot demand, not macro relief alone.” This distinction is critical, as a rally driven solely by external economic factors may not resolve the underlying issue of absent organic buying interest.
Broader implications of sustained hesitancy
The current lack of enthusiastic Bitcoin buyers, despite repeated market corrections, carries broader implications for the cryptocurrency ecosystem. Historically, significant leverage flushes have often been seen as necessary cleansing events that pave the way for healthy market rebounds. The absence of such a rebound now suggests a more profound shift in investor sentiment and market dynamics.
This situation also overshadows events that would typically be considered bullish catalysts. For instance, the Bitcoin halving event occurred in April 2024, a mechanism designed to reduce the supply of new Bitcoin and often associated with upward price pressure. However, its immediate impact has been muted by the prevailing macroeconomic uncertainty and the persistent lack of spot demand.
Matt Mena of 21Shares outlined a four-part checklist for a constructive outlook into November: Bitcoin holding $76,000 to $78,000 and reclaiming $80,000 to $82,000, Binance completing withdrawals and proving its reserves, favorable credit spreads, oil and long-end yields, and crucially, a return of ETF flows. All these points hinge on a resurgence of real buyer activity and restored confidence.
The market’s reaction, or lack thereof, to these leverage flushes draws a stark contrast to how Bitcoin weathered past crises, such as the collapses of Celsius, FTX, and BlockFi, or even the Bybit hack of February 21, 2025.
While Bitcoin’s infrastructure itself proved resilient during the recent Binance hack, this institutional strength doesn’t necessarily translate into retail or new institutional demand. The ongoing struggle to attract new capital suggests that while the system may not break, its growth trajectory could be significantly hampered by a prolonged period of investor reluctance.
Ultimately, until real flows emerge, the question of what truly moves Bitcoin’s price will remain.