As open interest rises and broader exchange activity boosts, market leverage has become heavier, with the average daily crypto liquidations in this cycle nearly tripling.
According to a new report from Glassnode and Fasanara, the daily average liquidation scale for futures has increased from approximately $28 million in long positions and $15 million in short positions during the previous cycle to about $68 million in long positions and $45 million in short positions in the current cycle.
This was most evident on October 10, when researchers referred to this reset as "an early version of Black Friday." During the sell-off, as Bitcoin dropped from $121,000 to $102,000, over $640 million in long positions were liquidated every hour. Open interest plummeted by 22% in less than 12 hours, from $49.5 billion to $38.8 billion, which Glassnode described as one of the most severe deleveraging events in Bitcoin's history.
Futures activity has significantly expanded, with open interest climbing to a record $67.9 billion. The report noted that trading volume in the futures market also surged, reaching as high as $68.9 billion in a single day in mid-October, with perpetual contracts accounting for over 90%.
Notably, according to Glassnode, Bitcoin's spot trading volume has also doubled compared to the previous cycle, with the daily average range rising to between $8 billion and $22 billion. During the crash on October 10, the hourly spot trading volume soared to $7.3 billion, more than three times the recent peak, as traders chose to buy the dip rather than flee the market.
The report stated that since the launch of the U.S. spot exchange-traded fund (ETF) in early 2024, Bitcoin's price discovery has increasingly shifted to the spot market, while leverage has become more concentrated in futures. This shift has attracted capital to major assets, pushing Bitcoin's market share from 38.7% at the end of 2022 to 58.3% now.
Capital flows tell a similar story. Monthly inflows into Bitcoin have ranged between $40 billion and $190 billion, bringing its realized market cap to a record $1.1 trillion and generating over $732 billion for the network since the cycle low in 2022, surpassing the total of all previous cycles combined.
Glassnode stated, "This highlights a more institutionally dominated and structurally mature market environment."
The report also pointed out that Bitcoin's role as a settlement network is now rivaling the world's largest payment channels. Over the past 90 days, the Bitcoin network has processed $6.9 trillion in transfers, exceeding the processing scale of Visa and Mastercard during the same period.
Meanwhile, Bitcoin's supply is steadily shifting from retail trading venues to institutional holdings. Glassnode noted that approximately 6.7 million Bitcoins are currently distributed across ETFs, corporate balance sheets, and centralized and decentralized vaults. Since early 2024, ETFs alone have absorbed about 1.5 million Bitcoins, while balances on centralized exchanges have been declining.
Related: Bitcoin (BTC) surged to $93,000 after a pullback on Sunday, with analysts eyeing the $100,000 mark.
Original article: “Glassnode: As Leverage Overheats, Daily Crypto Liquidations Nearly Triple”
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