Bitcoin Sees Sharpest Deleveraging Since 2023, Says CryptoQuant

• Bitcoin has undergone its sharpest deleveraging phase since 2023, according to CryptoQuant’s Darkfost.
• Binance open interest briefly fell below its 180-day average before recovering to $9.6 billion.
• Darkfost warned that excessive leverage could trigger another major deleveraging event.

Bitcoin has recently gone through its sharpest deleveraging phase since 2023, according to CryptoQuant analyst Darkfost.

During the sell-off, Binance’s Bitcoin open interest briefly dropped below its 180-day average, signaling that a significant amount of leveraged positions had been flushed from the market. The move coincided with one of the largest liquidation events in Bitcoin’s history, reducing excessive leverage across futures markets.

Deleveraging events often reset market positioning by forcing overleveraged traders to exit their positions.

Open Interest Rebounds Above Average

Following the liquidation wave, Binance’s Bitcoin open interest has recovered to approximately $9.6 billion, comfortably above its 180-day average of $8.3 billion.

According to Darkfost, Binance now accounts for roughly 37% of Bitcoin’s total open interest, highlighting the exchange’s dominant role in BTC derivatives trading. He noted that traders have returned to the market and are helping fuel Bitcoin’s recent rebound.

The recovery suggests leveraged participation is gradually increasing again.

Leverage Remains a Key Risk

The latest Bitcoin deleveraging episode highlights both the resilience and the risks of the derivatives market.

While the recent reset may have strengthened market structure by removing excessive leverage, Darkfost cautioned that a rapid buildup in leveraged positions could eventually trigger another sharp deleveraging event. Investors will continue monitoring open interest, funding rates, and liquidation data as Bitcoin’s recovery unfolds.