Market Sentiment Hits Rock Bottom: Bitcoin Falls Out of Top 10 Assets – While Leverage Traders Make a Risky Bet

Market Sentiment Hits Rock Bottom: Bitcoin Falls Out of Top 10 Assets – While Leverage Traders Make a Risky Bet

The Bitcoin community is currently experiencing a paradoxical situation: While the largest cryptocurrency falls out of the top 10 most valuable assets worldwide, leveraged long positions on the exchange Bitfinex simultaneously reach a two-year high. These seemingly contradictory developments paint the picture of a market oscillating between hope and capitulation – and reveal deep uncertainty about future developments in an increasingly risk-averse global investment environment.

The positioning of market participants and Bitcoin's relative performance compared to traditional assets provide important clues about how investors currently categorize digital gold – and what risks could lurk in the coming weeks.

The Facts

According to CompaniesMarketCap, Bitcoin is no longer among the world's ten most valuable assets for the first time in a considerable period ^[1]. With a current market capitalization of $1.651 trillion, BTC was overtaken by Saudi Arabian oil giant Saudi Aramco ($1.663 trillion). Semiconductor manufacturer TSMC and tech giants Meta, Amazon, Microsoft, Apple, and Alphabet now also rank ahead of Bitcoin ^[1]. At the top of the most valuable assets is gold with $36.182 trillion, followed by silver ($6.140 trillion) and chip company Nvidia ($4.687 trillion) ^[1].

Bitcoin's price crashed on Thursday to its lowest level in over two months, testing the support level at $84,000 again ^[2]. This represents a 26 percent decline over the past 90 days ^[2]. Ethereum, the second-largest cryptocurrency, even fell back to 47th place in the asset ranking ^[1].

Parallel to this price decline, demand for leveraged long positions on the exchange Bitfinex reached 83,933 BTC, the highest level since November 2023 ^[2]. These positions represent a nominal value of $7.3 billion. However, borrowing costs for these margin positions remain extremely low at under 0.01 percent annually, as Bitfinex requires collateral exceeding the value of the loan ^[2]. Many traders use margin positions instead of futures to avoid so-called "carry costs," which currently stand at about 5 percent per year for BTC futures ^[2].

On Thursday, Bitcoin futures positions worth $360 million were forcibly liquidated ^[2]. Market observers attribute the broad sell-off of risk assets to geopolitical tensions in the Middle East, with media reports about possible military options by the Trump administration in the Iran conflict intensifying nervousness ^[1]. Additionally, concerns about overvaluation in the technology sector weighed on sentiment: Microsoft shares fell 11 percent after the company reported increased capital expenditures and disappointing cloud server revenue figures ^[2].

The development in precious metals is also noteworthy: Gold experienced an 8 percent crash within 30 minutes on Thursday but quickly recovered half of the loss ^[2]. According to Bloomberg analyst Eric Balchunas, the SPDR Gold Shares ETF recorded record trading volume of over $25 billion ^[2]. The combined market capitalization of gold and silver reached $43.4 trillion ^[2].

Analysis & Context

Current market data reveal deep uncertainty among Bitcoin investors, who are torn between different narratives. On one hand, Bitcoin's descent from the top 10 most valuable assets signals a significant loss of confidence. This is particularly noteworthy because Bitcoin was often positioned during bullish phases as an ascending asset that would overtake traditional companies in valuation. The fact that even a single oil company is now more valuable than the entire Bitcoin network illustrates the dimensions of the recent sell-off.

On the other hand, the two-year high in margin long positions on Bitfinex shows that a group of traders continues to bet on rising prices – or at least uses arbitrage strategies. However, caution is warranted here: As Cointelegraph correctly analyzes, professional traders frequently use "cash-and-carry" strategies, where they simultaneously build margin longs and sell futures contracts ^[2]. The net effect of this rising margin activity is therefore likely neutral and should not be interpreted as a purely bullish signal. The low borrowing costs for margin positions compared to carry costs for futures make such arbitrage trades attractive, regardless of actual market expectations.

The macroeconomic environment could hardly be more challenging. The extreme volatility in gold – traditionally viewed as a safe haven – shows that even established protective assets are coming under pressure. The record volume in the gold ETF indicates that institutional investors are frantically repositioning and seeking orientation. In this environment, Bitcoin is being torn between two narratives: On one hand, the claim to be digital gold and inflation protection, on the other hand, the reality that BTC is often traded like a highly volatile tech asset during crisis phases. Concerns about overvaluation in the AI sector and disappointing Microsoft figures further intensify risk aversion by sowing doubts about the sustainability of tech valuations.

Historically, periods of extreme leverage combined with falling prices have often been harbingers of further volatility. The $360 million in forced liquidations on a single day is a warning signal: Should prices continue to fall, cascade effects from further liquidations could emerge. At the same time, such capitulation phases could also mark buying opportunities – but only if the macroeconomic environment stabilizes and risk appetite returns.

Conclusion

• In the current environment, Bitcoin has lost ground both against traditional companies and precious metals – a clear sign that the asset is currently perceived as a risky tech investment rather than a safe haven.

• The high margin long positions on Bitfinex are likely less a bullish signal than an expression of arbitrage strategies where futures are simultaneously sold – the net effect on the market is probably neutral.

• The volatile behavior of gold and record volumes in precious metal ETFs show that entire markets are operating in a regime of uncertainty where even traditional safe-haven assets provide no stability.

• The combination of high leverage and falling prices carries the risk of further forced liquidations and thus additional downward volatility should support at $84,000 fail to hold.

• In the medium term, it will be crucial whether Bitcoin can regain its positioning as an alternative store of value – but for that to happen, the macroeconomic environment would first need to calm down and investor risk appetite would need to return.