Binance CEO Richard Teng: The recent market drop is a temporary retreat, not a reversal

Bitcoin (BTC) returned to its levels from the end of November 2024, completely reversing the US election narrative and Donald Trump’s influence on crypto hype. BTC accelerated its drop toward $86,000, sparking comments from Binance’s CEO Richard Teng that the move was a temporary retreat. 

The current market turbulence is a tactical retreat, not a reversal, wrote Binance’s CEO Richard Teng in a recent thread. The past two days caused market panic as Bitcoin (BTC) extended its drawdown from its all-time high. 

Teng believes crypto can bounce back even stronger, as it has shown after similar stress tests. 

Here's my thoughts on the recent market turbulence: It's important to view this as a tactical retreat, not a reversal.

Crypto has been here before and bounced back even stronger. Here's why we should stay optimistic. ⤵️

A thread 🧵

— Richard Teng (@_RichardTeng) February 25, 2025

Binance went through $334M in total liquidations for the past 24 hours, a level that is not unusual for mid-cycle drawdowns. The Binance liquidations were surpassed only on Bybit, which turned into the most active market in the past 24 hours. 

Despite the price fluctuations and break below the $90,000 range, BTC has not seen a significant drawdown in this post-halving cycle. In other cycles, the depth of the bear market erased 70% to 90% of its value, but this time, BTC has seen corrections of up to 25%. 

In the short term, the BTC price move followed the liquidation of short positions all the way down to $86,000, as some traders predicted. The liquidation cascade affected other assets, shifting the available liquidity. 

After the recent drawdown, the crypto market will remain with a peak inflow of stablecoins, potentially moving to the next big trend while abandoning defunct narratives.

BTC, ETH sink after Bybit stress test

The market also sits at a crossroads that may define the coming months. The recent election cycle, followed by several meme token trends, was seen as an overly aggressive grab for liquidity, which essentially burned out the energy for a 2025 bull market. 

The Bybit hack, followed by significant liquidations on the exchange, was another stress test for the market. BTC has recovered after more significant liquidations, but this time, a general loss of sentiment may reverse the recent relatively easy rallies. 

Historically, BTC retains relatively low volatility. Even bull cycles have shown resilience, continuing after drawdowns of up to 40%. However, the latest post-halving market enjoyed outsized mainstream attention and caused high expectations of an always-growing market. 

For crypto, there are few mechanisms to forestall losses, even when there are dedicated buyers and holders. Liquidations for leveraged positions still cause significant price swings. The market is becoming better at absorbing the losses, and exchanges are more liquid with new inflows of stablecoins. Despite this, the market sentiment has changed dramatically, with traders showing extreme fear of opening new positions. 

Crypto assets still manage a small bounce off the recent lows

During the latest drawdown, the percentage of addresses in profit was down to 89.33%. BTC has fallen to levels that may mean capitulation for some of the latest buyers. Despite this, even recent buyers expect a more active 2025 bull market and are reluctant to sell. 

The recent dip to $86,000 showed BTC was resilient enough to bounce from the lows twice in a day. BTC recovered to $87,009.92 while previously bouncing over $89,000 again. 

Other altcoins took the recent correction in stride, with relatively small drawdowns. The market has affected hype assets the most, while altcoins remain in their usual range.

After the loss of confidence in the meme market, most assets are down over 90%, and there are expectations memes may never recover. Overall, only the top 5 blue chips have recovered their all-time highs with ease, while other assets require much more liquidity and hype to make a return. 

The crash of the meme token market has deeply affected both Solana (SOL) and ETH, as the two assets are down more than 50% from their all-time high. With that recent drawdown, the entire ecosystems are getting reassessed for their abilities to lock in gains and retain liquidity for the long term.

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