Average daily liquidations of Bitcoin have dramatically increased as leverage and open interest reach record highs. A new report from Glassnode and Fasanara reveals that this surge in liquidations is largely driven by heightened leverage in the market.
According to Glassnode data, average daily liquidations in futures trading have escalated significantly from the previous market cycle. Liquidations in long positions soared from approximately $28 million to an average of $68 million in the current cycle, while short position liquidations increased from $15 million to $45 million.
The most significant liquidations occurred on October 10, referred to as “Early Black Friday,” when a staggering $640 million in long positions were liquidated within an hour as Bitcoin’s price plummeted from $121,000 to $102,000. Following this drastic price movement, open interest in Bitcoin futures dropped by 22% in less than 12 hours, highlighting the volatility in leveraged trading environments.
The report also indicates a sharp escalation in futures activity, with open interest hitting an all-time high of $67.9 billion and daily turnover reaching peaks of $68.9 billion. Notably, perpetual contracts now account for over 90% of this activity, signifying a shift in trading dynamics.
In addition to futures, Bitcoin’s spot trading volume has seen a remarkable increase, now ranging between $8 billion to $22 billion daily—doubling compared to the previous cycle. During the aforementioned crash on October 10, hourly spot trading volume surged to $7.3 billion as traders rushed to buy the dip.
The anticipation around the launch of U.S. spot bitcoin exchange-traded funds (ETFs) in early 2024 has influenced price discovery trends, steering activity towards the cash market while fostering concentrated leverage in futures trading. This shift has allowed Bitcoin’s market share to expand from 38.7% in late 2022 to 58.3% today, with monthly inflows varying between $40 billion and $190 billion. Realized capitalization has reached a record $1.1 trillion, with over $732 billion entering the Bitcoin network since its lows in 2022.
Glassnode emphasizes that this environment reflects a more institutionally anchored and structurally mature market.
The report further highlights Bitcoin’s increasing competitiveness as a payment network, stating that it now processes more settlement volume than traditional giants Visa and Mastercard, with a total of $6.9 trillion transferred in the past 90 days.
Moreover, the supply of Bitcoin is gravitating towards institutional investors, with approximately 6.7 million BTC now held by ETFs, corporate treasuries, and other large entities. Since the beginning of 2024, ETFs alone have absorbed around 1.5 million BTC, while balances on centralized exchanges have seen a decline, showcasing a shift in the investment landscape.
