CryptoQuant analysts warn of potential liquidation risks in the Bitcoin market due to increased leveraged trading and retail selling.
The increase in leveraged trading is raising concerns about potential liquidation events in the Bitcoin market, as indicated by CryptoQuant analyst Darkfost. He examined the open interest data on Binance, noting significant trends.
Bitcoin has just undergone its most significant deleveraging since 2023.
This is reflected in a substantial drop in Binance's Open Interest, which has now fallen below its…
— Darkfost (@Darkfost_Coc) September 7, 2026
Futures Market Sees Increased Activity
According to Darkfost, the recent Bitcoin price correction resulted in the largest reduction in leverage since 2023. The open interest on Binance has dipped below its 180-day average, illustrating the rapidity of the market's shifts.
Darkfost characterized the closing of large positions as a necessary corrective measure. Despite this, the open interest still sits at $9.6 billion, which exceeds the 180-day average of $8.3 billion and constitutes approximately 37% of Bitcoin's total market.
While the return of traders may bolster the current price recovery, Darkfost warned that excessive leverage could lead to further liquidation waves in the future.
Retail Investors Selling Despite Price Gains
Though Bitcoin's price has been climbing, driven primarily by futures trading, there has been a noticeable decline in buying activity, according to CryptoQuant contributor CW8900. Furthermore, the spot demand metric has turned negative.
The negative spot demand for Bitcoin indicates retail investors are selling.
“They continue to sell despite rising Bitcoin prices, having adapted to the decline and using uptrends to offload their holdings.” – By @CW8900
— CryptoQuant.com (@cryptoquant_com) September 7, 2026
This selling trend among retail investors occurs even as prices recover, with CW8900 suggesting that these investors have adjusted their strategies to capitalize on price rebounds. In contrast, larger holders appear to be accumulating Bitcoin, which CW8900 views as a positive sign amid the overall weakness in the spot market.
If the selling trend among retail investors continues, it could impede any upward price momentum. A sustained rally may be difficult to achieve without a rebound in spot demand.
Currently, Bitcoin is trading at approximately $79,300, reflecting a slight decline of 0.1% over the past day. Notably, on the night of September 3-4, Bitcoin approached the $82,000 threshold, with total liquidations in the crypto market reaching $536 million, predominantly from short positions.
