Bitcoin Sees Major Deleveraging as Market Shakeout Hits

Bitcoin just underwent its most intense period of deleveraging since 2023. The market shakeout wiped out both long and short positions that became too heavy during a year defined by sharp price swings. This process was triggered when Bitcoin futures open interest on Binance dropped below its 180 day average, signaling a widespread exit from borrowed positions.

While this purge was painful for many traders, analysts view the cleanup as a necessary step for the market. By reducing excess leverage, the structure of the crypto market becomes slightly more stable. However, the relief was short lived. Recent data shows open interest climbing back to $9.6 billion, which is still above the 180 day average of $8.3 billion. This quick return of leverage suggests that another round of liquidations remains a real possibility.

Looking at the broader picture, Bitcoin has spent a turbulent 2026. After months of trading in a tight range between $60,000 and $66,000, a late August surge pushed the price briefly above $80,000. Despite a slight pullback, many observers believe this momentum could signal the end of the bear market. Traders are now watching closely to see if Bitcoin can maintain its current levels or if the market needs another correction before aiming for $100,000 later this year.