On July 3, a report from CoinDesk indicated that Bitwise views the recent volatility in STRK as more akin to a late-cycle deleveraging event within the crypto market rather than a systemic issue with Strategy's fundamentals. This perspective shifts the market's focus from the fluctuations of a single company to the structural changes in capital flows during Bitcoin's cycle. CPT Markets believes the critical issue for the current Bitcoin market is whether leverage risks have been sufficiently unwound. The previous price decline forced adjustments in some highly leveraged positions. If institutional capital gradually replaces the influence of a single large buyer, the sources of market volatility may become more diversified, and price discovery could rely more on genuine demand.
The report mentioned that Strategy's new framework has transformed it from a persistent one-way buyer into a more flexible capital allocator, which may reduce the market's excessive reliance on its purchasing activity. In the short term, this change introduces uncertainty; however, in the long term, if institutional funds take over, the market structure could become healthier. Analysis from CPT Markets suggests investors need to distinguish between two types of risk: "short-term shocks from deleveraging" and "a deterioration in the fundamental demand base." If ETF inflows resume and macroeconomic expectations improve, Bitcoin may complete a phase of bottom-building. Conversely, if capital outflows persist, any rebound is likely to be unstable.
Future Bitcoin price movements will be jointly determined by institutional allocation, interest rate expectations, and on-chain selling pressure. While there are signs of market repair, more trading volume and capital flow data are needed to confirm a more solid bottoming area. CPT Markets added that the deleveraging phase is often accompanied by sharp volatility but may also create the conditions for a new round of capital structure adjustment. If institutional buying gradually replaces high-leverage capital, price fluctuations will persist, but the market's dependence on single events should diminish.
Bitcoin currently needs more confirmation of a recovery on the demand side, rather than relying solely on short covering. A more stable bottoming area is more likely to form only if ETF inflows, spot trading volume, and options risk appetite improve simultaneously. CPT Markets further stated that for the market to confirm the leverage adjustment is nearing its end, it needs to observe a decline in liquidation volumes alongside a recovery in spot trading. While a single rebound is informative, it is insufficient to replace the validation of capital flows. The market currently reacts quickly to individual news items; therefore, subsequent analysis should combine continuous data to observe trend strength. If price, volume, and capital flows do not improve in sync, short-term rallies may still transition into consolidation phases.
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