Bitcoin’s sharpest rally during the past two years of drawdown was not driven by a wave of new bullish bets. It was driven largely by shorts getting forced out, according to a joint report from analytics firm Glassnode and crypto exchange Bybit cited by Decrypt.
Bitcoin rose 24.6% in five days as open interest fell 12.6%
The report found that over five days in August, Bitcoin climbed 24.6% even as coin-denominated open interest, a gauge of active leverage, dropped 12.6%. In the authors’ reading, that mix points to forced unwinds of existing short positions rather than traders adding fresh longs.
Roughly 64,000 BTC worth of open interest was closed out during the move, and shorts made up 89% of every liquidated dollar across that stretch.
Options pricing showed the same pattern
The options market carried a similar signal. Puts, which traders buy as protection against a price decline, had been priced richer than calls for 361 straight days. That run ended in a single session, flipping nearly a year of downside positioning as traders rushed to reprice the market.
Front-end futures moved sharply while longer maturities barely shifted
Bybit’s own volatility index moved four times its normal daily range in one session. At the same time, the front of the futures curve repriced sharply, while longer-dated contracts showed little movement. The report said that pattern suggested traders viewed the move as a one-off event rather than a lasting regime change.
The dataset covers crypto-native venues and excludes CME
The report also laid out several limits on scope. The Glassnode-Bybit study used data as of the settled close of August 23. Glassnode’s options coverage spans four crypto-native options venues and does not include CME, meaning the figures describe the crypto-native market rather than every venue where Bitcoin trades.
Another squeeze hit this week after Bitcoin moved back above $80,000
The same dynamic has not disappeared, the article said. Bitcoin jumped back above $80,000 this week after the Federal Reserve paired its first rate hike since 2023 with a dovish forecast.
That surge triggered another squeeze. More than $230 million in Bitcoin shorts was liquidated in a single session, while liquidations across the broader market topped $445 million. CoinGlass data showed about $529 million in total liquidations over 24 hours, with shorts again accounting for the majority.
The open question is whether August’s repricing will last
The report’s authors said the central question raised by their own data is whether the repricing seen in August will stick. A more durable shift would show up in skew continuing to favor calls and in the front of the curve holding firm. If put premium returns and funding fades instead, the move would look more like an event the market absorbed than a new regime it entered.