Bitcoin set to refocus on macro as speculative washout eases

Investing.com -- Bitcoin’s sharp early-December reversal is setting the stage for the market to shift back toward macro drivers after a period dominated by forced deleveraging and micro-level stress, according to BCA Research.

The recent drawdown was less about a change in fundamentals and more about excess speculation being flushed out, BCA strategists led by Artem Sakhbiev said in a Thursday report. 

The move began with a 10% slide into the Monday open before snapping back above $90,000, a pattern BCA links to a series of localized shocks rather than shifts in risk appetite or yields.

The firm highlights quantitative-strategy repositioning, S&P Global’s downgrade of Tether, MicroStrategy’s signal that it may sell Bitcoin, and renewed pressure from China’s crypto crackdown as notable catalysts.

Positioning data shows that sentiment washed out quickly. October saw a record $19 billion liquidation of long positions, while the “market-value-to-net-asset-value ratio” for Bitcoin treasury companies dropped below 1, indicating a depressed outlook.

Strategists also point to the share of supply in profit falling to 65%, the lowest since late 2023, alongside a collapse in the crypto Fear and Greed Index to levels last seen during the 2022 crypto winter.

With leverage largely purged, the team argues the asset is again poised to “re-anchor to macro drivers as institutional demand continues to build.” The long-term narrative, they say, remains intact.

Vanguard has begun allowing crypto allocations on its platform, while Bank of America has endorsed a 1–4% crypto allocation for wealth-management clients. ETF flows have turned positive again, and BCA’s Global Asset Allocation Strategy notes that steady inflows have helped anchor volatility over time.

BCA reiterates that Bitcoin continues to function as a form of “global wealth’s insurance asset,” benefiting from limited supply and growing demand as global wealth expands. Strong gold and silver performance is cited as further evidence of firm appetite for alternative reserves.

Short-term risks remain, however, particularly after Bitcoin broke below key technical support. Still, BCA says the price is holding above the True Market Mean — the cost basis of active investors — suggesting the broader uptrend is intact.

The firm upgraded Bitcoin to overweight on December 1, viewing any move below $90,000 as an attractive entry point for long-term investors.

"With excess speculation now flushed out and the structural bull case unchanged, current levels are again becoming attractive – particularly for investors with a constructive risk outlook," strategists wrote in the report. 

They also note that Bitcoin’s recent underperformance versus gold appears stretched. A fractal indicator tracking the BTC/gold ratio now “suggests elevated odds of a reversal,” supporting a tactical long position in that spread.