One metric to quantify the previous deleveraging is shown in the chart below, which depicts JPM's position proxy for CME bitcoin futures: this position proxy stands close to levels last seen in January 2020 pointing to rather advanced deleveraging.

The deleveraging phase that followed the Terra collapse had induced a 50% decline in crypto market cap from around $1.7tr at the beginning of May to a low of $0.86tr by mid-June. With the crypto market cap standing at just above $1tr before the FTX/Alameda Research collapse, JPM's guess is that the crypto market will find a floor above $500bn in the current deleveraging phase.

Another way of thinking about the downside from here is the bitcoin production cost which historically acted as a floor for the bitcoin price. At the moment, this production cost stands at $15k but it is likely to revisit the $13k low seen over the summer months. A production cost of $13k implies 25% downside from here which would bring the crypto market cap to a low of $650bn.