Key facts
- Bitcoin's rally from August 18-23 saw a 24.6% price increase.
- During the rally, Bitcoin open interest fell 12.6%.
- Short liquidations accounted for 89% of all liquidated dollars during the August rally.
- The options market shifted from a put-dominant to a call-dominant pricing after 361 days.
- Data for the report was collected through August 23 from four crypto-native venues, excluding CME.
Bitcoin experienced its most significant rally in two years, climbing 24.6% over five days in August, but this surge was driven by the forced unwinding of short positions rather than new bullish investments, according to a joint report by analytics firm Glassnode and crypto exchange Bybit. The data, covering four crypto-native venues up to August 23, showed that while Bitcoin's price rose, coin-denominated open interest, a measure of leverage, fell by 12.6%. This indicates that the rally was fueled by bears being liquidated, with short positions accounting for 89% of all liquidated dollars during that period. Approximately 64,000 BTC worth of open interest was closed out. The options market also reflected this shift, as puts had priced richer than calls for 361 consecutive days before flipping in a single session. Bybit's volatility index saw a fourfold increase in its normal daily range during one session, and the front of the futures curve repriced sharply while longer-dated contracts remained stable, suggesting the market viewed the August move as a one-off event rather than a fundamental regime change. More recently, Bitcoin surpassed $80,000 this week following the Federal Reserve's rate hike and dovish forecast, triggering another wave of liquidations, with over $230 million in Bitcoin shorts and more than $445 million across the market liquidated in a single session.