Analysts say Bitcoin's early morning plunge was a leverage flush

On January 19, CryptoQuant analyst Axel stated that the bitcoin "Advanced Sentiment Index" rose to an extremely bullish range of about 80% between January 13 and 15, coinciding with the price approaching a local high of $97,000. Today, the index plummeted to 44.9%, falling below the neutral threshold of 50%, marking a shift in market structure and a deterioration in risk quality. During the early morning drop, the amount of liquidations in a single hour exceeded $205 million, with almost all liquidations dominated by long positions, which is a typical "sharp drop to clear leverage" pattern. Axel believes that if the liquidation volume continues to decline in the coming hours, the deleveraging process may be nearing completion.