Institutional trading platform Talos reports that the crypto market enters the third quarter with reduced leverage following the Q2 reset, but liquidity has also thinned. Bitcoin and Ether open interest fell sharply after $835 million in long liquidations, while ETF outflows, weaker Strategy purchases and declining market depth reduced liquidity further.
Q3 Opens with Lower Leverage, Thinner Liquidity
Institutional trading platform Talos released a report stating that the crypto market enters the third quarter of 2026 with significantly lower leverage after the second-quarter reset, but liquidity has also deteriorated. Data shows that Q2 witnessed $835 million in long liquidations, causing Bitcoin (BTC) and Ether (ETH) open interest to drop sharply. Meanwhile, continued ETF outflows, weakening purchases by Strategy (formerly MicroStrategy), and a decline in market depth have further squeezed trading liquidity.
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