Following a sharp deleveraging in Bitcoin, open interest on Binance rose to $9.6 billion, surpassing the 180-day average; an analyst noted that a new sharp flush out could occur if excessive leverage accumulates.
Leveraged trading in Bitcoin has begun to grow again after one of the sharpest liquidation periods since 2023. According to an assessment by CryptoQuant analyst Darkfost, open interest on Binance has reached approximately $9.6 billion.
This figure stands above Binance’s 180-day average of approximately $8.3 billion. Furthermore, positions on the exchange account for about 37 percent of the total open interest across Bitcoin. This indicates that leveraged trading has returned to the market following the sharp deleveraging.
Binance Open Interest Once Again Surpasses the Average
Darkfost described the recent movement as one of the sharpest deleveraging phases since 2023. The closing or liquidation of debt-fueled positions caused open interest to briefly drop below the 180-day average in the previous period.
According to the analyst, the return of traders supports the recovery in Bitcoin. However, the rapid growth of open interest could mean that leverage ratios in trades are rising once again. Therefore, if excessive leverage accumulates, a reversal in price movements could lead to a risk of a new sharp flush out.
Binance’s high share of total Bitcoin open interest increases the significance of changes on the exchange for the broader derivatives market.
Not investment advice.