Bitcoin just went through its sharpest deleveraging since 2023, and traders are already piling back in

Bitcoin’s futures market just got a violent rinse cycle. CryptoQuant analyst Darkfost flagged what he described as the sharpest deleveraging phase since 2023, with Binance’s Bitcoin futures open interest briefly dropping below its 180-day moving average. The event also earned a more dramatic distinction: the largest liquidation event of Bitcoin’s current market cycle.

The deleveraging was driven by forced liquidations and an aggressive unwinding of leveraged positions.

The numbers behind the flush

Despite the sharp decline, Binance’s Bitcoin open interest remains at $9.6 billion. That figure still sits comfortably above the $8.3 billion 180-day moving average, which provides useful context about how inflated positioning had become before the correction hit.

Binance accounts for roughly 37% of total Bitcoin open interest across all exchanges.

What makes this episode notable isn’t just the speed of the decline. It’s what happened after. Traders have already re-entered the market, pushing open interest back above the 180-day average and contributing to a price rebound. The current OI levels on Binance actually exceed those seen during the May 2026 recovery, when Bitcoin surged back toward $82,000.

A pattern that keeps repeating

The current episode mirrors a longer deleveraging phase that played out over eight months, starting after open interest peaked in October 2025 and concluding around May 2026.

During that earlier stretch, Binance’s BTC open interest bottomed near $6.4 billion in March 2026. It then climbed steadily to approximately $8.96 billion by May, crossing back above the 180-day moving average of around $8.75 billion at that time. That crossover coincided with the price recovery toward $82,000, establishing the moving average as a meaningful signal for gauging market sentiment in the derivatives space.

What this means for the market

For spot holders, deleveraging events can actually be constructive. They clear out speculative excess and reset funding rates, often creating healthier conditions for sustained price appreciation. The May 2026 recovery is a case in point: Bitcoin’s rally to $82,000 came after months of gradual leverage reduction, not during a period of peak speculation.

Binance’s persistent dominance in Bitcoin derivatives adds another dimension to watch. With 37% of total open interest concentrated on a single exchange, any disruption to Binance’s operations, whether technical, regulatory, or otherwise, could amplify future deleveraging events across the broader market.

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