Analyst: Futures Market Shows 'Deleveraging Signal' Suggesting Bottoming Phase

The futures market has exhibited a potential 'deleveraging signal' over the past three months, with analysts suggesting this could mark the formation of a market bottom according to Bloomberg. Open interest in Bitcoin, for example, has fallen sharply since October 2025, with a 31% decline from its peak. This trend aligns with historical patterns in market structure, where sharp liquidation events often precede a reset and a possible bullish recovery as reported by Yahoo Finance.

The U.S. Senate Banking Committee delayed a markup of the digital asset market structure bill on January 15, 2026, following Coinbase's withdrawal of support. The firm's CEO, Brian Armstrong, stated that the current version of the bill would be worse than the current regulatory status quo and that it would harm the crypto industry according to Bloomberg.

The delay has had immediate implications for the crypto market. Bitcoin dropped below $96,000 on the same day, with Ethereum, Ripple, and other major altcoins also experiencing declines as reported by FXStreet. The market reacted swiftly to the uncertainty surrounding the bill, with long liquidations rising as investors reassessed risk exposure.

Why Did This Happen?

The Senate Banking Committee's decision to delay the market structure markup followed Coinbase's public opposition to the current draft. The firm cited several concerns, including restrictions on stablecoin rewards and DeFi prohibitions that could limit privacy rights according to FXStreet.

The bill had previously been backed by Coinbase and other major players in the crypto industry, who viewed it as a way to stabilize the market and provide legal clarity. However, Armstrong's public stance has highlighted the growing divide between the crypto industry and regulators over the scope and enforcement of the bill as Bloomberg reported.

Stablecoin rewards, in particular, have become a point of contention. Banks argue these rewards resemble high-yield deposits without the same regulatory oversight, while crypto advocates maintain they are essential for incentivizing liquidity and user engagement according to Forbes.

How Did Markets Respond?

Bitcoin's price dropped 1% on January 15, breaking its four-day upward trend and testing key support levels. The 50-day exponential moving average is now a critical threshold, currently at $92,089 according to FXStreet. If Bitcoin continues to fall, it could trigger further technical sell-offs and test lower resistance levels.

Other major cryptos, including Ethereum and Solana, also saw declines, with Ethereum losing nearly 3% in a single day as reported by FXStreet. The broader market sentiment turned cautious as investors anticipated further regulatory developments. Futures markets showed signs of stabilization, but open interest remained below the 180-day moving average as Yahoo Finance reports.

What Are Analysts Watching Next?

Analysts are closely monitoring the technical and sentiment indicators in the crypto markets. A key focus is whether Bitcoin can hold above $95,000, with a potential breakout above $105,000 expected to signal a more bullish phase according to Yahoo Finance. The positioning index, which combines open interest, funding rates, and long-short ratios, has entered bullish territory for the first time since mid-October 2025 as reported by Yahoo Finance.

The Senate Banking Committee has yet to announce a new date for the markup. In the meantime, bipartisan discussions continue with both industry and financial sector representatives. Committee Chairman Tim Scott emphasized the importance of the bill as a result of months of negotiations with stakeholders according to FXStreet.

Market participants are also watching for further comments from the Federal Reserve. Governor Stephen Miran recently noted that deregulation could justify lower interest rates by boosting productivity and reducing inflationary pressures according to Bloomberg. While the Fed has largely maintained a data-dependent stance, Miran's remarks signal a potential shift in the broader economic narrative that could indirectly affect crypto markets.

With regulatory uncertainty and market volatility continuing, investors are advised to monitor key economic indicators and regulatory developments closely. The interplay between policy, market sentiment, and technical indicators will likely shape the short- to medium-term trajectory of the crypto market.