The cryptocurrency market has experienced significant volatility in late 2025, with sharp price drops and liquidation waves impacting Bitcoin and Ethereum. Bitcoin's open interest decreased by $2.06 billion, a 6.1% drop, while Ethereum saw a $480 million reduction, down 2.5%. This deleveraging forced both retail and institutional investors to close positions after a period of aggressive speculation. Following the liquidation wave, market volatility has begun to normalize, with Bitcoin's actual volatility falling to 48.4% and Ethereum's to 67.8%. Institutional interest is resurging, highlighted by a $254.5 million inflow into Bitcoin ETFs, led by Fidelity. However, altcoins like Solana and XRP remain vulnerable, with high long/short ratios posing risks of further liquidations. Regulatory uncertainties, including potential reclassification by MSCI, continue to add caution to the market.