Bitcoin set for new August lows as Binance longs face cleanout
Bitcoin heads to new August lows as Binance futures open interest falls and leveraged long positions are liquidated, CryptoQuant data show.
Onchain analytics firm CryptoQuant flagged a flush of leveraged long Bitcoin positions on Thursday after Binance futures open interest fell alongside price weakness.
CryptoQuant community analyst “BorisD” published the analysis focusing on the link between Bitcoin price and open interest on Binance. Open interest measures the total value of active derivative contracts and reflects capital committed to futures markets. The firm reported Binance OI rose to $8.15 billion on Wednesday while spot price traded in a narrow range since June.
CryptoQuant said the correlation between Binance OI and Bitcoin price moved into flux as lower-timeframe volatility increased. The correlation reading reached 0.25 on Thursday as both price and OI fell. The analyst wrote that the number reflects declining long positions and that the “anticipated cleanout has begun.”
BorisD described a period where open interest initially rose even as prices dropped, creating what the analyst called a “double-sided squeeze” of long traders buying dips and new shorts entering the market. He added that “The simultaneous drop in both price and OI indicates that leveraged long positions are giving up, getting stopped out, or facing liquidation.”
Liquidation trackers showed broad exits across crypto markets. CoinGlass recorded roughly $236 million in cross-crypto liquidations over a 24-hour period at the time of reporting.
CryptoQuant CEO Ki Young Ju posted an onchain indicator heatmap and wrote that “the stars haven’t aligned for a Bitcoin bull run just yet,” citing several indicators that remain in bearish territory. Other onchain metrics include a Glassnode indicator that has entered its longest capitulation phase since the end of the 2022 bear market.
CryptoQuant’s report noted that rising open interest during an extended sideways price range can leave leveraged positions concentrated in the low $60,000 area vulnerable to a rapid unwind when a directional move begins.
The data and commentary are presented for information and do not constitute investment advice. Analysts say interaction between futures leverage, open interest and price action will be important to watch as traders and funds adjust positions.
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