Bitcoin Sees Largest Deleveraging Event Since 2023 Amid Volatile Trading
Bitcoin has undergone its largest deleveraging phase since 2023 in 2026 due to heavy liquidations of leveraged long and short positions amid volatile trading. Open interest on Binance briefly dropped below its 180-day average but later rose again, indicating that leverage remains high.
This recent deleveraging is seen as necessary for Bitcoin's health, with the cryptocurrency experiencing a significant price surge above $80,000 in August. The price surge has sparked optimism about a potential end to the bear market and forecasts of a rise to $100,000 by year-end. However, experts warn that the renewed leverage also raises the risk of another deleveraging event.
The large short position on Hyperliquid that saw an estimated $25.7 million unrealized loss may be a concern for investors. The wallet held a significant long position in Bitcoin with a $107 million value and an unrealized profit of $4.42 million, but the Zcash price topped $1,200, causing a substantial paper loss.
Bitcoin's weekly Super Trend indicator has flipped to bullish for the first time since the recent downtrend began, following a strong price rebound in August from around $63,000 to over $80,000. This signal, observed by Bitfinex, confirms a longer-term trend change.