Crypto is experiencing a pullback this week (BTC -8%, ETH -8%) but this dip is less about fundamentals and more about traders sobering up. For months, a lot of people in crypto were running *heavy* leverage (say, buying $100K of Bitcoin with only $25K of their own money and borrowing the rest). Then the market wobbled, they got margin-called, and the sell-off fed on itself. Classic late-cycle optimism meets math. Now with most of those forced sellers flushed out, the setup looks cleaner and the same people who panic-sold might soon be panic-buying. And there’s also a timing twist: Bitcoin’s last big run started right after the 2024 election. A lot of those buyers were waiting to hit the one-year mark for lower capital-gains taxes but when the market turned, they sold a little early. A tax play that backfired. The bottom line? In our view, this latest dip is likely just a short-term shakeout of these highly leveraged traders. Once the dust settles, we believe risk capital may rotate back into crypto.
