There's something interesting about recent Bitcoin market dynamics. Deleveraging is underway, but it doesn't seem to have reached the true capitulation point yet.

If we look at data from CryptoQuant, there are two main indicators to observe. First, the CME futures Bitcoin basis compression shows a downward pattern since the beginning of the year, similar to what happened ahead of the 2019 and 2022 bear markets. But what's interesting is that the yield curve slope remains positive until now.

This still-positive curve actually indicates that demand for leverage exposure is still present, just cooling off. Market participants are becoming less willing to pay premiums for Bitcoin exposure. This reflects weakening bullish confidence and a more neutral or bearish sentiment. Long-term contracts are still trading at a premium compared to spot, but the momentum has shifted.

Even more significant is the decline in futures open interest. Data shows CME Bitcoin open interest has fallen 47% from its peak, a figure comparable to the 45% decline seen in 2022. This is a massive unwinding of risky positions after a period of high participation. Prolonged liquidations, decreased speculative demand, and lower hedging activity all confirm that a deleveraging cycle is in progress.

Now, the combination of these two indicators provides an interesting picture. The current condition is more about consolidation or bearishness within the cycle, not sudden capitulation. This means Bitcoin still has room to fall further before the cycle bottom is truly formed. The real bottom usually only forms when the yield curve turns negative, indicating backwardation and acute deleveraging.

So, if asked whether we are already at the bottom? Not yet. This is still a gradual position adjustment phase, not the acute pressure that typically marks the bottom formation. But these signs suggest that definitive capitulation might be just around the corner.