Crypto Liquidations Nearly Triple as Futures Leverage Builds
Daily crypto liquidations have nearly tripled in the current market cycle as leverage expands across futures markets, according to a report by Glassnode and Fasanara. Average daily futures liquidations have increased from roughly $28 million in long positions and $15 million in shorts in the prior cycle to $68 million in long positions and $45 million in shorts this cycle.The trend was most pronounced on Oct. 10 in an episode researchers termed “Early Black Friday.” During the sell-off, more than $640 million per hour in long positions were liquidated as Bitcoin (BTC) fell from $121,000 to $102,000. Open interest declined 22% in less than 12 hours, dropping from $49.5 billion to $38.8 billion, which Glassnode described as one of the sharpest deleveraging events in Bitcoin’s history.Futures activity has accelerated, with open interest reaching a record $67.9 billion. Daily trading volumes in futures climbed to as high as $68.9 billion in mid-October, with perpetual contracts accounting for more than 90% of activity, the report said.Bitcoin Futures market. Source: GlassnodeBitcoin spot trading volume doublesSpot market activity has also increased. Glassnode reported that Bitcoin’s spot trading volume has doubled compared with the previous cycle, moving into a daily range of $8 billion to $22 billion. During the Oct. 10 decline, hourly spot volume jumped to $7.3 billion, more than triple recent peaks, as buyers stepped in during the drawdown.The report noted that since the launch of U.S. spot exchange-traded funds (ETFs) in early 2024, price discovery has shifted toward the spot market, while leverage has concentrated in futures. This dynamic has funneled capital toward major assets, lifting Bitcoin’s market share from 38.7% in late 2022 to 58.3% currently.Capital flows reflect the shift. Monthly inflows to Bitcoin have ranged from $40 billion to $190 billion, raising its realized capitalization to a record $1.1 trillion and bringing more than $732 billion into the network since the 2022 cycle low—exceeding all previous cycles combined. “This highlights a more institutionally anchored and structurally mature market environment,” Glassnode said. The current cycle spans from the November 2022 market bottom to the present, while the prior cycle primarily covers the 2021 bull market through the 2022 downturn.Bitcoin’s settlement volumes rival major payment networksThe report also highlighted Bitcoin’s role as a settlement network. Over the past 90 days, the Bitcoin network processed $6.9 trillion in transfers, exceeding volumes handled by Visa and Mastercard over the same period.Holdings are increasingly shifting toward institutional vehicles. Glassnode estimated that approximately 6.7 million BTC is now held across ETFs, corporate balance sheets, and centralized and decentralized treasuries. Since early 2024, ETFs alone have absorbed about 1.5 million BTC, while balances held on centralized exchanges have declined.
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