According to a report by Greg Cipolaro, head of research at NYDIG, published on Odaily, the key drivers that previously propelled Bitcoin's price to its peak—inflows into exchange-traded funds (ETFs) and demand for digital asset treasury (DAT) assets—are now causing prices to fall to multi-month lows.
Cipolaro stated that a major liquidation event in early October, which reversed ETF inflows, caused a collapse in the treasury premium, and led to a decline in stablecoin supply, indicates that liquidity is leaving the system—a "classic sign" that "the cycle is losing momentum." He pointed out that once this cycle breaks, the market tends to follow a predictable sequence: liquidity tightens, leverage struggles to gain momentum, and the narratives that previously supported the market no longer translate into actual cash flows.
He noted that spot Bitcoin ETFs have shifted from a reliable engine of capital inflows to a "significant headwind." During cyclical corrections, Bitcoin dominance tends to surge as speculative assets undergo more dramatic liquidation, and capital consolidates back into the most mature and liquid assets in the ecosystem. Data shows that Bitcoin dominance rose above 60% in early November and stabilized at around 58% as of Monday.
Cipolaro stated that the supply of DAT and stablecoins has declined for the first time in months, indicating that investors appear to be withdrawing liquidity. However, he emphasized that even if the market decline deepens, the DAT sector is still a long way from a real breakdown, and currently "leverage remains moderate and interest obligations are manageable."
Despite the recent pullback, Cipolaro believes that "Bitcoin's long-term story remains unchanged" because it continues to attract institutional attention, sovereign interest is slowly building, and its role as a neutral, programmable monetary asset remains. He added that what has happened in the past few weeks has not altered its long-term trend, but cyclical factors driven by fund flows, leverage, and reflexive behavior are now playing a more powerful role. (Cointelegraph)
