Glassnode: Bitcoin Liquidations Surge as Leverage Hits Record Highs

Average daily bitcoin liquidations have surged this cycle as leverage and open interest reach unprecedented levels, according to a new report from Glassnode and Fasanara.

Leverage drives liquidation spikes

Glassnode data shows that average daily futures wipeouts have risen from about $28 million in long positions and $15 million in shorts last cycle to $68 million long and $45 million short in the current cycle.

The most dramatic event occurred on Oct. 10, dubbed “Early Black Friday,” when over $640 million per hour in long positions were liquidated as bitcoin fell from $121,000 to $102,000. Open interest collapsed 22% in less than 12 hours.

Futures activity has escalated sharply, with open interest reaching a record $67.9 billion and daily turnover peaking at $68.9 billion.

Perpetual contracts now represent more than 90% of this activity.

Spot volume and institutional flows rise

Bitcoin’s spot trading volume has also doubled compared to the previous cycle, moving into the $8 billion to $22 billion daily range.

During the Oct. 10 crash, hourly spot volume spiked to $7.3 billion as traders bought the dip.

The launch of U.S. spot bitcoin exchange-traded funds (ETFs) in early 2024 has shifted price discovery towards the cash market, while leverage has concentrated in futures.

Bitcoin’s market share has grown from 38.7% in late 2022 to 58.3% today, with monthly inflows ranging from $40 billion to $190 billion.

Realized capitalization has reached a record $1.1 trillion, and over $732 billion has entered the network since the 2022 cycle low.

Glassnode stated:

“This highlights a more institutionally anchored and structurally mature market environment.”

Bitcoin rivals major payment networks

The report also noted that bitcoin now processes more settlement volume than Visa and Mastercard, with $6.9 trillion transferred over the past 90 days.