21Shares: Bitcoin's decline is a short-term adjustment, and fluctuations may continue until the end of the year

Maximilian Michielsen, an analyst at cryptocurrency ETP issuer 21Shares, stated that the drop in Bitcoin price below $100000 has raised concerns in the market about a bear market, but this decline is considered a short-term correction rather than the beginning of a deep or long-term bear market. Although volatility and consolidation may continue until the end of the year, fundamental factors remain stable. The recent weakness of Bitcoin is mainly affected by forced liquidation, large investor sell offs, ETF fund outflows, and liquidity tightening caused by macro events. Since October, the market has experienced a deleveraging of $32 billion, with a liquidation scale of $3 billion in the past week; Large investors sold approximately $12 billion worth of Bitcoin; The spot Bitcoin ETF experienced a capital outflow of $866 million last Thursday, setting the second highest daily outflow record in history. In addition, the US government shutdown has led to the Treasury Department withdrawing approximately $150 billion in cash from the financial system, exacerbating liquidity tensions. Nevertheless, the selling pressure on long-term investors has significantly weakened, and assets are being transferred to more stable holders. Liquidity conditions are expected to improve, the quantitative tightening in the United States is expected to end in December, government spending will resume, and the global money supply will continue to expand. The attractiveness of Bitcoin as a value storage tool is increasing in the macroeconomic context. Analysis indicates that Bitcoin is currently in a short-term bear market technically, but this decline is more like a valuation reset than a deep bear market. Historical data shows that this magnitude of pullback typically ends within 1 to 3 months and marks the consolidation phase before the next round of uptrend. The long-term fundamentals of Bitcoin remain stable.