With numerous brokers and market makers making counterparty exposure disclosures, Celsius filing Chapter 11, and staked ether (stETH) returning towards parity, it is likely crypto contagion fears have peaked in the interim, Citi (C) said in a research report on Wednesday.

Staked ether’s discount to ether (ETH) has narrowed, which suggests some liquidity stress may have passed, the report said, adding that the “acute deleveraging phase” has now ended given many of the large brokers and market makers in the sector have disclosed their exposures.

In a further positive sign, stablecoin outflows have been stemmed, the bank said, and outflows from crypto exchange-traded-funds (ETFs) have also stabilized in recent weeks. Exchange and futures leverage is also “benign”, it added.

Volatility in crypto markets in May and June resulted in a number of “intra-market dislocations,” one of which was the difference between the price of bitcoin (BTC) on Coinbase in U.S. dollars versus that on rival exchange Binance in tether (USDT), the note said.

The Coinbase price is normally at a premium, which could reflect new entrants or institutional demand, but the price turned to a discount in May, the note said. This “Coinbase premium” is now also returning towards historical levels, which suggests reduced crypto market stress, the note added.

Citi says crypto markets are probably too small and isolated to have spillover effects into the wider financial markets or the economy, but they can still impact investor sentiment. Contagion fears have likely peaked, at least for the time being, the note added.

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