Bitcoin's 24.6% surge over five days in August ran almost entirely on short sellers being forced out of their positions, not fresh buying, according to a joint report from Glassnode and Bybit. Coin-denominated open interest fell 12.6% during the same stretch, and short positions supplied 89% of every liquidated dollar.
Bitcoin's sharpest rally of its two-year drawdown wasn't built on new bullish bets. It ran on bears getting crushed, according to a new report from analytics firm Glassnode and crypto exchange Bybit.
Shorts, not buyers, drove the move
Over five days in August, Bitcoin climbed 24.6% even as coin-denominated open interest, a measure of active leverage, fell 12.6%. That combination is the tell: instead of traders piling into new long positions, the move ran on the forced unwinding of existing shorts.
Roughly 64,000 BTC worth of open interest was closed out, and short positions supplied 89% of every liquidated dollar during the stretch. The options market told the same story.
Puts, the contracts traders buy to protect against a fall, had priced richer than calls for 361 straight days. A single session ended that run, flipping roughly a year of downside positioning as the market scrambled to reprice.
A one-off event, not a new regime
Bybit's own volatility index traveled four times its normal daily range in one session, and the front of the futures curve repriced sharply while longer-dated contracts barely moved. That is a sign the market read the move as a one-off event rather than a lasting regime change.
A few caveats apply. The report is a Glassnode and Bybit collaboration, with data as of the settled close of August 23, and Glassnode's coverage spans four crypto-native options venues, excluding CME. The figures therefore describe the crypto-native market rather than every venue where Bitcoin trades.
The dynamic hasn't gone away. Bitcoin blasted back above $80,000 this week after the Federal Reserve paired its first rate hike since 2023 with a dovish forecast.
That rebound triggered another squeeze, liquidating more than $230 million in Bitcoin shorts and over $445 million across the market in a single session. CoinGlass data showed roughly $529 million in total liquidations over 24 hours, the majority again from shorts.
The report's authors flagged the open question their own data raises: whether August's repricing sticks. A durable shift would show up as skew holding call-bid and the front of the curve staying firm. A return of put premium alongside fading funding would instead mark it as an event the market absorbed, not a new regime it entered.
Source: Decrypt
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