VanEck: Bitcoin’s 29% Drop Has Reset Leverage and Exhausted Sellers
VanEck’s Bitcoin ChainCheck report says Bitcoin’s 29% drawdown over the past 30 days has largely reset market leverage and exhausted “mid-cycle” sellers. The asset manager’s researchers, Patrick Bush and Matthew Sigel, note futures open interest has fallen to its lowest dollar level since September 2024 while on-chain activity remains strong (daily transactions in the 90th percentile). Spent Volume by Age Band (SVAB) shows most selling came from holders who bought between one and five years ago; selling from coins older than one year has decelerated sharply. Realized losses of about $22.5 billion were absorbed in the last month. Mining margins have compressed due to lower prices and static electricity costs, making older rigs unprofitable above ~$0.07/kWh; the network hash rate contracted roughly 14% over 90 days. VanEck highlights that sustained 90-day hash rate drawdowns historically precede strong three‑month forward returns, suggesting seller capitulation may mark a market bottom. Key points for traders: BTC price volatility and leverage have decreased, on-chain demand remains resilient, miner capitulation is reducing supply pressure, and short-term sentiment sits in “fear” territory—conditions that can precede sharp rebounds but still carry downside risk until distribution fully normalizes.
Neutral
VanEck’s report contains mixed signals that justify a neutral market view for traders. Bearish elements: Bitcoin has declined 29% in 30 days, realized losses (~$22.5B) are large, futures open interest has fallen (reduced liquidity), and miner margins are squeezed—hash rate declined ~14%, indicating miner capitulation and near-term selling pressure. Bullish elements: on-chain demand remains robust (daily transactions in the 90th percentile), SVAB shows distribution from mid-cycle holders has decelerated (seller exhaustion), and historical precedents suggest sustained 90-day hash rate drawdowns often precede strong three-month returns. For short-term trading, the exhaustion of sellers and reduced leverage can lower tail risk and set the stage for sharp rebounds; however, market participants should watch for renewed distribution, macro triggers, and liquidity re-entry which could reopen downside. For position sizing: consider reduced leverage, tighter stops, and watching derivatives open interest and SVAB metrics for confirmation. For longer-term investors, miner capitulation and persistent on-chain demand are constructive signals that may support a bullish recovery once sentiment stabilizes. Overall, the mix of capitulation and resilient fundamentals makes an immediate directional conviction premature—hence neutral.