Bitcoin Price Rallies to Nearly $79,000 Amid Declining Leverage

The price of Bitcoin has surged by about 22% since mid-August, climbing from around $63,500 to nearly $79,000. This rapid increase in value is notable, especially considering that derivatives data suggests traders did not heavily leverage the market during this time.

Coin-based open interest fell 11% to approximately 312,600 BTC, its lowest level in one month, according to Santiment. Meanwhile, dollar-denominated open interest rose about 8%, indicating that each Bitcoin became more valuable. This distinction matters when assessing how much borrowed risk entered the market.

Regulated funds supplied another source of demand for Bitcoin, with $1.6 billion of net inflows into Bitcoin ETFs from Monday through Thursday, according to Glassnode data. The largest daily inflow was $606 million on Thursday, the largest since May.

The rapid price increase can be attributed in part to short liquidations, which accelerated during this time. Anthony Pompliano described the move as the largest Bitcoin short squeeze on record. Coinglass data shows more than $1 billion in short liquidations within 60 minutes when Bitcoin crossed $69,000.

The zone near $79,000 to $80,000 marks the upper boundary of the broader $60,000 to $80,000 range. Sellers may defend this level after the 22% climb, and a sustained break would require spot demand to persist after short-liquidation pressure fades.