TLDR:

• XRP long liquidations surged 832% over the past week, reaching nearly $3.0 million in forced exits.
• Open Interest dropped from $1.18B to $1.04B, reflecting an 11.1% monthly decline in leveraged exposure.
• Binance XRP reserves fell just 0.35% weekly, showing spot holders remained calm amid futures turmoil.
• A Tom DeMark “9” buy signal and Morning Star Doji pattern suggest XRP could rebound toward $1.30.

XRP derivatives markets recorded a sharp deleveraging episode over the past week, with long liquidations surging 832% versus the prior month.

Open Interest fell from roughly $1.18 billion to approximately $1.04 billion. Funding rates turned deeply negative, registering a -463% shift against the quarterly baseline.

The data points to a forced exit of leveraged long positions rather than an orderly rollover, resetting the market’s overall risk structure.

Cascading Liquidations Clear Speculative Excess From XRP Futures

Long liquidations reached nearly $3.0 million over the seven-day period, far outpacing short liquidations. This imbalance confirms that upside-positioned traders bore the brunt of the selloff. The scale of exits reflects a systematic purge rather than isolated margin calls across the derivatives market.

Open Interest declining by 11.1% on a monthly basis reinforces this interpretation. When OI falls alongside deeply negative funding rates, it typically means leveraged longs are being closed, not transferred. The market is shedding speculative weight accumulated during the prior uptrend.

Source: CryptoQuant

Despite the futures turmoil, spot-side behavior told a different story. Binance XRP reserves remained relatively stable, down just 0.35% on the week.

That restraint among holders suggests limited appetite to deposit tokens for immediate sale, even as price weakened noticeably.

The divergence between panicked futures positioning and composed spot holders is notable. Historically, this kind of split often marks a transitional phase rather than an outright bearish continuation. Whether that transition resolves bullishly depends on how sellers respond next.

Technical Signals and Utility Developments Add Context to XRP’s Next Move

On the technical side, analyst Ali Charts flagged two reversal patterns forming on the daily chart. The Tom DeMark Sequential printed a “9” buy signal, which historically anticipates a one-to-four candle relief rebound.

Additionally, the past three sessions completed a Morning Star Doji formation, a pattern traditionally associated with localized price bottoms.

Ali Charts noted that if buying volume accelerates, XRP could move toward the $1.30 level from current prices near $1.05.

These signals do not guarantee a sustained trend change, but they do indicate potential short-term momentum shifts worth watching.

On the fundamental side, Ripple’s launch of RLUSD in Japan through SBI VC Trust adds a longer-range utility layer to the XRP ecosystem.

Stablecoin infrastructure tied to regulated partners in a major market could support broader adoption over time.

The immediate focus, however, remains on Open Interest recovery. A rebound in OI alongside normalizing funding rates would confirm that fresh demand is entering the market.

Until that happens, the question is whether short-sellers press their advantage or negative funding triggers a short-covering rally.

Fidelity Digital Assets has pushed back against concerns that Bitcoin’s long-term security will deteriorate as mining rewards decline, arguing in a new research report that the network’s economic incentives remain sufficient to secure the blockchain over time.

The report, authored by Fidelity research analyst Daniel Gray, reiterated the view that Bitcoin’s security depends on more than block rewards. Transaction fees, market incentives and other economic forces continue to encourage miners to secure the network and make sustained attacks prohibitively expensive, it said.

The findings challenge a longstanding criticism that each quadrennial halving weakens Bitcoin’s security by reducing the issuance of new coins. Critics argue that declining block rewards could eventually erode miners’ incentives unless transaction fees grow enough to offset the shortfall.

The issue has become one of the most closely watched long-term questions surrounding Bitcoin (BTC), whose fixed supply schedule gradually reduces new issuance until block subsidies eventually disappear. Whether transaction fees and other incentives can sustain network security remains a central debate among developers and market participants.

Since April 20, 2024, Bitcoin miners have received a subsidy of 3.125 BTC for each block they mine, down from 6.25 BTC during the previous halving cycle. However, Gray argued that lower issuance has not translated into weaker incentives for miners because Bitcoin’s rising price has more than offset the decline in block rewards.

He pointed to the growth in average daily miner revenue, which increased from roughly $26,300 during Bitcoin’s first halving cycle to more than $40.2 million today. “Despite declining issuance, miner incentives — and by extension, network security — historically strengthened alongside Bitcoin’s price,” Gray wrote.

Bitcoin’s average daily miner revenue has increased substantially across halving cycles. Source: Fidelity Digital Assets

Related: Nvidia’s $20 billion debt boom reinforces Bitcoin miners’ AI pivot

Public Bitcoin miners face mounting financial pressure

While Fidelity argues that Bitcoin’s long-term incentive structure remains intact, many publicly traded mining companies continue to face near-term financial pressure. Some industry analysts have described the current environment as one of the most challenging on record, citing lower mining rewards, rising costs and growing competition.

In response, several miners have diversified into artificial intelligence and high-performance computing, leveraging existing power infrastructure and data center assets to meet growing demand for AI workloads rather than relying solely on Bitcoin mining.

A recent report by VanEck estimated that publicly traded miners could require up to $50 billion in additional capital to fully transition to AI infrastructure, underscoring the scale and cost of the shift.

Public miners face a large funding gap in realizing their AI ambitions. Source: Miner Weekly

“A Bitcoin mine can run with relatively simple buildings, modular infrastructure and ASIC fleets that tolerate fast curtailment,” Blocksbridge Consulting wrote in a recent Miner Weekly publication. “AI and HPC facilities require higher standards for uptime, cooling, electrical redundancy, networking and customer support.” 

Related: Crypto Biz: Is AI the exit strategy for miners?

Digital Currency Group-backed investment firm Yuma has launched the Yuma Total Market Fund, a pooled product designed to give institutional investors diversified exposure to the Bittensor ecosystem—without requiring them to pick individual subnet tokens.

Announced on Thursday, the fund is structured to provide exposure to Bittensor’s native TAO token alongside a basket of AI-focused subnets. Yuma says the aim is to package participation in Bittensor’s decentralized AI infrastructure economy into a single vehicle, with seed capital provided by an undisclosed anchor investor.

Key takeaways

• Yuma’s new fund targets broad exposure to Bittensor via TAO plus a basket of AI subnet assets in one pooled strategy.
• The firm positions the approach as simpler than selecting and managing individual subnet tokens directly.
• Network “subnet value” figures vary materially depending on the tracker used—Yuma cites $900M+ across 128 subnets, while Taostats points to roughly $300M.
• Institutional interest in Bittensor-linked assets has been rising, reflected in Grayscale’s evolving TAO weighting and filings for TAO exchange-traded products.
• Renewed attention to decentralized AI follows US Commerce Department actions impacting access to Anthropic models, underscoring the debate over reliance on centralized providers.

A fund built around Bittensor’s subnet economy

Bittensor is a decentralized network for building AI infrastructure and applications, operating through specialized subnets. These subnets focus on different areas such as compute, marketplaces, and identity. Rather than betting solely on the performance of TAO as a single token, Yuma’s strategy blends exposure to TAO with additional subnet-related assets.

According to Yuma, Bittensor’s 128 subnets collectively represent more than $900 million in combined value. However, data from network tracker Taostats suggests a lower combined subnet value—closer to $300 million. For investors, this gap matters because the “size” of the subnet economy can be measured differently depending on the methodology behind network trackers, and those assumptions influence how meaningful “diversification across subnets” really is.

Yuma did not disclose the anchor investor that provided seed capital. Still, the launch signals a shift in how asset managers are structuring access to decentralized AI systems: instead of treating Bittensor as a single-token theme, they are increasingly packaging it as an ecosystem.

How institutional allocations are changing for TAO

Institutional exposure to Bittensor-linked assets has broadened alongside the network’s expanding subnet economy, and TAO allocations within established funds offer a window into how managers are rebalancing their decentralized AI theses.

In April, Grayscale increased TAO’s weighting in its Grayscale Decentralized AI Fund to 43% during the fund’s quarterly rebalance. Since then, TAO’s allocation has fallen to about 20%, while Near Protocol’s NEAR has become the largest holding at roughly 44%.

That evolution highlights a familiar dynamic in crypto asset management: even when a thesis is “decentralized AI,” the portfolio can still rotate as managers weigh relative opportunities across tokens they view as part of the same broader category. For readers, it suggests that TAO may remain central to decentralized AI exposure, but it is not immune to shifting portfolio construction as other ecosystem players gain weight.

ETF momentum: filings for TAO exposure

Beyond private funds, the push to bring TAO exposure into more traditional investment wrappers is also accelerating. Asset managers have been filing with US regulators to create exchange-traded products tied to Bittensor.

In April, Bitwise filed for a TAO Strategy ETF with the US Securities and Exchange Commission (SEC). Grayscale, meanwhile, submitted an amended registration statement aimed at converting its existing Bittensor Trust into a spot TAO exchange-traded fund that would be listed on NYSE Arca, if approved.

These filings reflect growing demand from investors who want exposure to decentralized AI through regulated market infrastructure. If regulators approve spot TAO structures, it could reduce friction for institutional allocators who prefer standardized instruments over bespoke crypto holdings.

Why decentralized AI is back in focus

The interest in Bittensor’s model is occurring amid renewed scrutiny of centralized AI access. The case for decentralized AI—where AI infrastructure and computing are distributed across blockchain-based networks rather than relying on a single provider—has gained traction after the US Commerce Department suspended public access to Anthropic’s Fable 5 and Mythos 5 models over national security and export control concerns.

Grayscale head of research Zach Pandl argued that the restrictions underscored the risks of centralized control of AI. According to Pandl, investors may seek alternatives such as Bittensor and its TAO token as they look for ways to avoid single-provider chokepoints.

While the restrictions initially tightened, the situation appears to be easing. The Commerce Department restored access to Mythos 5 on Friday, and Axios reported Saturday that the Trump administration is expected to allow Anthropic to resume public access to Fable 5 as soon as next week.

Even if access returns quickly, the episode has already reframed parts of the conversation around decentralized AI. For market participants, it raises a practical question: are investors buying “decentralized AI” as a speculative crypto theme, or as a hedge against policy-driven disruptions that can affect availability and control of AI models?

What to watch next

With Yuma’s fund now live and multiple managers pursuing TAO-linked ETF pathways, the next signal to monitor is how these products structure their exposure to TAO versus subnet baskets—and whether regulatory outcomes for spot listings translate into broader institutional demand for Bittensor ecosystem exposure.

Bitcoin is flashing renewed signs of stress among short-term holders after a meaningful wave of coins moved to exchanges at losses over the past day. At the same time, the market value of short-term holder supply has dropped to $237.7 billion—its lowest point since October 2024—according to CryptoQuant.

While near-term sell pressure appears to be rising, the picture is not uniform. CryptoQuant also reported record inflows to long-term accumulation addresses, suggesting some longer-horizon investors are absorbing supply even as newer buyers reduce exposure.

Key takeaways

• CryptoQuant data shows Bitcoin’s short-term holder market capitalization fell to $237.7 billion on June 26, the lowest since Oct. 2, 2024.
• About 50,000 BTC moved to exchanges at a loss in the prior 24 hours, the largest such flow since June 4.
• Accumulation addresses saw record inflows of 181,000 BTC on Thursday, pointing to continued long-term buying.
• Multiple macro indicators and persistent institutional discount signals (Coinbase Premium Index below zero) have kept the risk-asset backdrop unfavorable.
• CryptoQuant flagged funding strains for Strategy (STRC) after its share-linked discount widened and its cash reserve declined in 2026.

Short-term holder capitulation signals return

CryptoQuant analyst Amr Taha said Bitcoin’s short-term holder (STH) market capitalization fell to $237.7 billion on June 26. That marks the lowest reading since Oct. 2, 2024, when the metric hovered near $239.7 billion.

The STH market cap tracks the market value of coins held by investors who bought Bitcoin within the past 155 days. When this measure drops below the cohort’s realized value, it typically implies that many of those relatively recent buyers are sitting on larger unrealized losses.

CryptoQuant notes a comparable pattern surfaced during the October 2024 correction, when the market later found an important bottom. However, the latest reading is framed as a stress signal rather than definitive confirmation that a low has already formed.

Exchange flows add a second, more immediate layer to the capitulation narrative. CryptoQuant reported that around 50,000 BTC from short-term holders moved to exchanges at a loss during the past 24 hours. Binance received about 9,500 BTC under similar conditions, the highest reading since June 3.

In practical terms, loss-to-exchange activity often reflects more aggressive sell decisions from near-term investors reacting to weaker prices—an asymmetry that can intensify downside pressure in the absence of fresh demand.

Long-term accumulation offsets the selling pressure

Despite the renewed loss-driven exchange activity, CryptoQuant highlighted a countervailing trend: Bitcoin inflows to accumulation addresses climbed to a record 181,000 BTC on Thursday.

CryptoQuant compared that figure with a prior peak of 94,700 BTC recorded in February 2022, emphasizing how unusual the current uptick is. Accumulation addresses typically receive coins with a history of low spending, and the reported surge suggests that longer-term investors are continuing to take supply off the table while short-term holders reduce exposure.

This divergence matters because it can help explain why sell-side pressure among newer holders does not automatically translate into a sustained, uninterrupted bear trend. Even if near-term holders keep capitulating, persistent absorption from long-term participants can limit how far the market extends downward.

Institutional demand remains constrained as rates stay tight

Several macro and institutional-demand indicators point to a cautious environment for Bitcoin buyers. Analyst Darkfost said institutional demand has continued to weaken, noting that the Coinbase Premium Index has remained below zero for 40 consecutive days since May 15.

The Coinbase Premium Index compares Bitcoin’s price on Coinbase Advanced with Binance. A persistent discount on Coinbase is generally interpreted as heavier selling from professional venues relative to more retail-linked pricing.

At the same time, US macro data contributed to expectations that monetary policy may not ease soon. The source cited headline PCE inflation at 4.1% versus an expectation of 4.0%, and core PCE at 3.4% versus 3.3%. GDP also came in above estimates at 2.1%, reinforcing a narrative of limited near-term relief for risk assets.

“This dynamic is a perfect reflection of the current macro backdrop, which remains deeply unfavorable for risk assets such as BTC.”

Asset manager Bitwise pointed to the Federal Reserve meeting referenced in its update as accelerating a hawkish shift. Bitwise said policymakers removed their easing bias and increased the median 2026 Fed funds projection to 3.8% from 3.4% in March.

Bitwise also linked tighter financial conditions to ongoing outflows from crypto exchange-traded products, including spot ETFs. The immediate takeaway for traders is that when funding conditions tighten and institutional inflows slow, dips can attract less immediate “buy-the-drop” behavior—even if long-term wallets continue to accumulate.

Strategy’s funding strain could matter for institutional flows

Attention has also shifted to Strategy, one of Bitcoin’s best-known institutional buyers. Bitwise estimated that Strategy accumulated 174,300 BTC in 2026, including about 96,000 BTC (55%) financed via STRC preferred equity issuances and another 77,500 BTC funded through MSTR common stock offerings.

CryptoQuant later argued that the purchasing capacity behind that activity may be weakening. In a report released this week, CryptoQuant said STRC traded at a record 17.5% discount to its $100 par value after falling to $82.5 last week, before slipping to around $73 in premarket trading on Friday.

CryptoQuant also said Strategy’s cash reserve has dropped 38% since the start of 2026 following the repurchase of a $1.5 billion convertible note. It further noted that annual dividend obligations tied to STRC have risen to $1.2 billion from $300 million, while dividend coverage has narrowed to about 14 months from as long as seven years.

Those constraints matter because Strategy’s continued buying has been a key element in the institutional-demand narrative around Bitcoin. If the company’s ability or willingness to finance additional acquisitions tightens, the market may face fewer incremental bids from one of its most prominent corporate participants—just as loss-to-exchange flows among short-term holders are rising.

For readers tracking the downside-to-absorption balance, the next developments to watch are whether short-term holder exchange inflows cool off after this day’s spike, and whether institutional demand signals improve as macro expectations evolve. At the same time, investors should monitor whether Strategy’s funding conditions stabilize—since that could influence how quickly large-scale institutional buying resumes if price volatility increases.