Bitcoin faces largest deleveraging since 2023

Bitcoin saw its sharpest deleveraging since 2023. Binance open interest briefly dipped below its 180-day average, but remains high, raising concerns about renewed leverage risks in a volatile market.

Bitcoin has undergone its most significant deleveraging phase since 2023, as Binance’s Bitcoin open interest briefly fell below its 180-day moving average, according to reports citing CryptoQuant analyst Darkfost. This marked the largest liquidation event in Bitcoin’s history, with forced liquidations and the closure of leveraged positions reshaping the derivatives market. Despite the sharp decline, Binance’s open interest remains elevated at $9.6 billion, surpassing the 180-day average of $8.3 billion and representing about 37% of total Bitcoin open interest. The deleveraging followed weeks of bearish sentiment and negative funding rates, leaving the market vulnerable to a short squeeze. As Bitcoin’s price rebounded, traders quickly re-entered the market. However, analysts warn that excessive leverage could trigger another major liquidation cycle. These developments highlight the importance of closely monitoring leverage levels amid ongoing market volatility.