Bitcoin went through its sharpest deleveraging phase since 2023, according to analysis shared on X by CryptoQuant's Darkfost on September 7. The deleveraging event saw a substantial reduction in positions backed by borrowed money, with both long and short bets becoming liquidated amid market volatility.
Binance's open interest on BTC futures fell below its 180-day average during the worst of the decline. However, the liquidations did not fully clear leverage from the market. By the time of Darkfost's analysis, Binance open interest had recovered to $9.6 billion, compared with the 180-day average of $8.3 billion.
The deleveraging followed a cycle dominated by futures volume. Darkfost noted that despite the event being difficult for traders, the phase was necessary for Bitcoin. He cautioned, however, that rising open interest levels increase the risk of another deleveraging event.
2026 Performance Context
Bitcoin's price performance in 2026 explains the extensive liquidations across both long and short positions. The cryptocurrency ended the year down 8.56% year-to-date, though it experienced multiple rallies during the period, including notable moves in mid-January, April, early May, and late August.
Most significantly, Bitcoin surged more than 25% in late August, breaking out of a $60,000 to $66,000 range where it had traded through most of the summer. The price reached above $80,000 before retracing to $79,931 at the time of the analysis.
