In the fourth quarter of 2025 and January 2026, the cryptocurrency market experienced a rapid correction after a period of continuous high-level fluctuations. Several mainstream public chains and leading assets saw significant declines in a short time, and screenshots of large-scale liquidations in the contract market flooded the community. After the sharp price correction, the market immediately split into two interpretative paths: one side represented by the Coinbase Institutional Q4 Report, advocating for a "healthier structure," and the other side reflecting the sentiment on social media that "institutions collectively took profits at high levels and exited the market." The question became increasingly pointed—was this adjustment a necessary clearing of leverage and structural repair beneficial for the future market, or was it an institutional reshuffling and confidence depletion under the guise of "risk management"?
Coinbase's Optimistic Structure
● Report Context and Release Timing: Coinbase Institutional released the report titled "Charting Crypto Q4 2025" at the end of the fourth quarter of 2025, following a sharp correction that continued into January 2026. At that time, the market had just experienced a collective retreat from high levels, with frequent liquidations in the futures market and community sentiment shifting from optimism to defensiveness. Therefore, this report, released "after the correction," was seen as the official stance of compliant institutions on this round of volatility, attracting widespread attention and interpretation.
● Core Assertion of "Healthier Structure": One of the report's authors, David Duong, explicitly stated, "The Q4 2025 correction has made the market structure healthier for 2026." In his view, the sharp price drop was understood as a necessary clearing of the previously accumulated high leverage and excessive optimism, reducing systemic risks in the subsequent upward process through a reshuffle. This framing redefined the current correction from a "disaster" to a "check-up," emphasizing that the outcome lays the foundation for the new year's market.
● Institutional Perspective and Interest Position: From the perspective of compliant institutions, the narrative of "healthy structure" and "controllable risk" aligns with their dual communication needs with regulators and institutional clients. On one hand, emphasizing that leverage risks have been released in stages helps maintain the compliant image of crypto assets as a configurable asset class in front of regulators; on the other hand, telling institutional clients that "volatility = opportunity + structural optimization" helps maintain their willingness to keep medium- to long-term funds in this sector rather than completely withdrawing after severe fluctuations.
● Data Gaps and Controversy Space: However, while emphasizing a "healthier structure," the report did not provide key quantitative indicators such as the extent of the decline in leverage ratios and changes in open interest in futures contracts. It also did not quantify the specific contraction ratios of financing/borrowing scales before and after. This "strongly qualitative, weakly quantitative" expression leaves enough room for imagination for supporters while giving skeptics reason to point out that, in the absence of specific data support, "healthier structure" is more of a directional judgment rather than a strictly data-driven conclusion.
Community Questions Institutional Profit-Taking: Who is Dumping?
● Emotional Evolution and Core Argument: Since the initiation of the major correction in Q4 2025, community discourse quickly shifted from "normal correction" to the narrative of "institutions collectively dumping to take profits." Typical statements include: traditional financial institutions significantly built positions earlier, driving prices up, and after macro uncertainties intensified and expectations of regulatory tightening rose, they collectively reduced their positions under the guise of "risk management," shifting the selling pressure onto retail investors and smaller institutions still in the market. This sentiment was continuously reinforced by a series of bearish candles and frequent spikes.
● Phenomena and Data Yet to be Verified: From publicly available information, some large sell orders in spot and futures markets, as well as a slowdown in ETF inflows or even short-term net outflows, indeed provide some material for the "institutional reduction" narrative. However, regarding the overall scale of institutional selling, specific selling rhythms, and whether there were obvious coordinated actions, there is currently no systematic, transparent data disclosure, nor authoritative institutions providing verifiable statistics. This means that "institutional profit-taking" remains at the level of logical deduction and emotional projection rather than confirmed fact.
● Dual Interpretation of Spot and Derivative Signals: During periods of severe volatility, selling pressure in the spot market and liquidations in the futures market often occur simultaneously. On one side, the community views concentrated selling and continuous spikes as "organized dumping," equating the main players actively suppressing prices with large on-chain transfers; on the other side, some argue that the crowded leverage in the futures market leading to passive liquidations and the spot market's passive stop-losses represent a typical process of turnover and deleveraging, not necessarily pointing to a specific "conspiracy." The same set of data is interpreted as entirely opposite market behaviors under different narrative frameworks.
● Basic Requirements Against Conspiracy Theories: In the absence of complete public data, hastily concluding that "institutions collectively reduced positions and dumped" easily slips into conspiracy theories that push motives based on outcomes. Whether attributed to ETF managers, leading market makers, or traditional investment banks, if it cannot be based on verifiable on-chain flows, changes in custody addresses, and regulatory disclosures, relying solely on price trends and emotional reasoning is difficult to substantiate. Criticism of institutional behavior can exist, but the premise should be data verifiable, rather than simply blaming all declines on "they are harvesting."
Evidence Gap in Leverage Clearing
● Missing Key Leverage Indicators: Discussing whether "leverage clearing" is sufficient typically requires seeing two sets of hard data—the extent of the overall decline in leverage ratios and the changes in open interest (OI) in futures contracts on mainstream trading platforms before and after the correction. However, regarding the fluctuations from Q4 2025 to January 2026, public channels have yet to provide a systematic summary of the decline in leverage ratios, nor is there authoritative statistics on the total and structural changes in OI. This makes the "completion of deleveraging" largely dependent on subjective piecing together of scattered data fragments.
● Common Methods for Depicting Deleveraging: In conventional analytical frameworks, researchers would integrate indicators such as perpetual contract positions, forced liquidations and voluntary reductions, and the shift of funding rates from positive to negative or from high to flat to depict whether a deleveraging process is "deep" and "sustained." A sharp decline in OI combined with large liquidations and a significant drop in high positive funding rates is often seen as a signal that high-leverage funds are being forced out, while a rapid recovery of OI and a swift return of funding rates to a bullish range indicate that leverage is likely just a temporary turnover rather than a systemic contraction.
● On-Chain Activity and Large Transfers as Auxiliary Signals: In the absence of complete contract data, observers turn to on-chain dimensions, tracking the number of active addresses, transaction counts, and the trajectory of large fund inflows/outflows to exchanges. If during the correction, large addresses continuously concentrated inflows to exchanges accompanied by significant selling, and then there was no large-scale return, while on-chain activity simultaneously declined, it could be inferred that some leveraged funds chose "true exit" rather than "reshuffling"; however, these inferences still rely on publicly visible fragmentary data and are difficult to fully cover off-chain lending and internal institutional hedging.
● Limitations of the "Healthier Structure" Judgment: Given the current incomplete data, directly concluding that "this round of correction has significantly made the market structure healthier" inevitably overlooks the complexity of hidden leverage, off-chain derivative tools, and cross-market leverage chains. In other words, we can acknowledge that this round of correction indeed brought about some forced liquidations and risk asset reductions, but elevating it to the conclusion that "systemic leverage has significantly cleared" lacks complete evidence and may lead the market to develop an excessive sense of security in the face of subsequent fluctuations.
Silver Surpassing $100 and Gold Reaching New Highs: A Shift in Safe-Haven Narrative
● Abnormal Timing and Prices of Precious Metals: In sync with the correction of crypto assets, traditional safe-haven assets experienced a rare surge in Q4 2025. According to public data, the price of gold once approached $4980 per ounce, and spot silver broke through $100 per ounce. This level reset historical perceptions and was not a typical "moderate rise," but rather carried a significant emotional premium. Timing-wise, this scene highly overlapped with the severe fluctuations in the crypto market, providing a strong visual contrast for the "safe-haven switch" narrative.
● Ole Hansen's Interpretation of Macro Anxiety: Ole Hansen, the head of commodity strategy at Saxo Bank, pointed out that the surge of silver to $100 was driven by a combination of safe-haven demand and macro anxiety. In his view, market concerns about future economic growth, monetary policy paths, and geopolitical situations accelerated the concentration of funds into traditional safe-haven assets like gold and silver. This perspective corroborates the trend of precious metal prices detaching from fundamental supply and demand, exhibiting "emotional premium."
● Safe-Haven Sentiment and Withdrawal from Crypto Positions: As gold and silver made headlines with "historic-level" gains, it inevitably squeezed funds from high-volatility crypto assets. Some leading assets that originally played the role of "digital gold" were suppressed by traditional safe-haven assets during heightened macro risks, and holders, with limited risk budgets, were more inclined to reduce positions with high leverage and greater regulatory uncertainty, transferring margin or spot funds to widely accepted safe-haven assets. This cross-asset rebalancing is not a simple "dumping," but a reordering of the entire risk spectrum.
● Fund Diversion and Narrative Reordering: Compared to Q4 2025, the trends of precious metals and crypto assets displayed a clear pattern of "one rising while the other falls": the former continuously set new highs amid macro anxiety, while the latter frequently faced setbacks during corrections, liquidations, and regulatory discussions. Accompanying this process, market narratives were also reordered—stories of "digital gold" and "hedging inflation" were reclaimed by traditional precious metals, while labels like "high beta growth" and "technology and financial experimental field" once again became the main keywords for crypto assets.
RWA and OP Game Heating Up: Fund Redistribution
● Ondo TVL Surpassing $2.5 Billion: Amidst the dramatic price fluctuations and safe-haven switches, the RWA track has quietly attracted capital. According to public data, Ondo Finance's TVL has surpassed $2.5 billion, standing out in the wave of capital migration in Q4 2025. This scale not only indicates that on-chain "real-world asset" products have moved beyond the early experimentation stage but also shows that some funds originally flowing into high-leverage DeFi strategies are seeking new landing spots that are closer to traditional returns and have more predictable risk profiles.
● The Crowding-Out Effect on Traditional DeFi Leverage: As the scale of RWA products providing on-chain bond-like returns and money market fund-like returns surges, they directly compete with traditional DeFi's amplified leverage strategies for funds seeking stable returns rather than extreme leverage. The former markets itself with "on-chain custody + real returns," while the latter is characterized by "high leverage + high returns + high risk." Against the backdrop of rising macro uncertainties and soaring precious metals, risk appetite naturally tilts towards the former, structurally weakening the demand for high-leverage strategies and creating a mild "deleveraging" crowding-out effect.
● Optimism Buyback Proposal and Reshaping Supply Expectations: Meanwhile, the voting controversy around the buyback proposal by Optimism DAO is reshaping the way funds price public chain tokens from another dimension. Some community members believe that the buyback mechanism could change the OP token's economic model, enhancing the attractiveness of long-term holding through secondary market buybacks and potential deflationary expectations; others worry that if the buyback and governance incentive designs are improper, it could lead to short-term speculation and resource misallocation. This debate has made "how to manage token supply and value capture" a variable that must be weighed in the new round of capital allocation.
● Redistribution between Public Chain Tokens, RWA, and L2: Overall, funds are undergoing a redistribution among mainstream public chain tokens like OP, RWA protocols, and the broader L2 ecosystem, centered on risk, return, and governance expectations: some funds have reduced their holdings in high-volatility mainnet tokens after the Q4 correction, shifting towards RWA products supported by real returns; others are betting that L2 and buyback mechanisms can bring better long-term value capture. This "horizontal migration" is superficially reflected in the underperformance or less-than-expected rebounds of individual assets, but at a deeper level, it indicates that the market is transitioning from a singular "price expectation" to a phase dominated by "structural and governance expectations."
From Davos to On-Chain: The True Mainline of 2026
From CZ's compliance reflections emerging from the Davos Forum to the emphasis on "structural health" in the Coinbase Institutional report, macro regulatory discourse and institutional narratives are synchronously reshaping the crypto market. On one hand, compliance pressure and risk management are being continuously reinforced, prompting large institutions to respond to regulation and public opinion by "reducing leverage and controlling volatility"; on the other hand, new narratives like RWA, L2, and buyback mechanisms are attempting to provide new imaginative spaces for capital within this stricter framework.
Looking back at the Q4 2025 correction, it included both genuine leverage clearing—passive and active reductions in the futures and lending chains—and institutional motivations for rebalancing and reshuffling based on macro and compliance considerations: moving from high-volatility assets to precious metals, RWA, and even public chain ecosystems with stronger governance and supply expectations. Simplifying all behaviors into "healthy clearing" or "malicious dumping" fails to accurately capture this multidimensional structural adjustment.
As we enter Q1 2026, the more important focus is not on betting on a specific price target, but on being wary of being swept up in a singular narrative—whether it is the optimistic view that "macro risks have been fully digested" or the pessimistic view that "institutions are always harvesting retail investors at high levels," both should be regarded as unverified viewpoints, not established facts. What truly deserves tracking is whether leverage data can quickly rebound again, whether the attraction of RWA funds can be sustained, and whether the governance and buyback paths of representative public chains like Optimism can fulfill their commitments to supply and value capture.
In this phase of accelerating intertwining of regulation and institutionalization, price fluctuations are merely surface noise; the true mainline of 2026 lies in leverage structures, capital migration, and governance games.
Join our community to discuss and grow stronger together!
Official Telegram community: https://t.me/aicoincn
AiCoin Chinese Twitter: https://x.com/AiCoinzh
OKX Welfare Group: https://aicoin.com/link/chat?cid=l61eM4owQ
Binance Welfare Group: https://aicoin.com/link/chat?cid=ynr7d1P6Z
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
