Open interest dropped below its 180-day average
Bitcoin has gone through one of its sharpest cleaning events in years. CryptoQuant analyst Darkfost said on X on September 7 that the move was the largest deleveraging since 2023. The process mostly involved positions opened with borrowed money, built up during a long futures-driven stretch of trading.
When prices turned violent, both overly heavy long and short positions were liquidated. One of the clearest signals came when Bitcoin open interest on Binance fell under its 180-day average. That type of move usually points to forced selling and margin calls spreading across the market.
Still, the shakeout did not remove as much leverage as some traders expected. By the time Darkfost posted his analysis, Binance open interest had already bounced back to $9.6 billion. The 180-day average stood at $8.3 billion. In other words, leverage is still part of the market, and that is worth paying attention to.
A necessary but tough phase
Darkfost called the deleveraging phase necessary. That might sound odd after such a painful period, but in a futures-heavy cycle, some degree of position clearing can reset the market. He also said it was tough on traders, which is an understatement given the size of the liquidations.
More recent data, he added, points to a possible bullish rebound for Bitcoin. But he warned that the renewed climb in open interest raises the risk of another deleveraging event. That leaves Bitcoin in an awkward spot. The cleanup helped, but the market may have already started building the next fragile setup.
Bitcoin price action remains messy
Looking at Bitcoin through 2026, it is easy to see why both sides of the market suffered. The cryptocurrency is down about 8.56% year-to-date. But it has also produced multiple sharp rallies, especially in mid-January, April, early May, and late August.
The late August move stands out because it was sudden. Bitcoin jumped more than 25% in a short period, briefly pushing above $80,000. At press time, it had pulled back to $79,931. That may not sound like much of a pullback, but the move broke Bitcoin out of the $60,000 to $66,000 range where it spent most of the summer. That breakout could matter more than the exact price level.
Some traders and analysts believe the late August upswing could mark the end of the bear market. Many still expect at least one more correction before the next real breakout. Still, a growing number of forecasts put Bitcoin at $100,000 before the end of 2026. That kind of target is possible, but the path there probably won’t be smooth. The latest rise in open interest is a reminder that leverage never really disappeared.
