The cryptocurrency market has entered a phase where leverage is growing faster than liquidity, and daily liquidations have become one of the main drivers of volatility. New data from Glassnode and Fasanara show that the cycle structure has changed much more than it appears on regular price charts.
Currently, futures markets are wiping out positions in volumes that were previously considered extreme. And this is the daily norm.
Liquidations are breaking records.
This is no longer a correction, but a new market mechanic
The average daily liquidation volume has grown almost threefold compared to the previous cycle. Now the market wipes out daily:
- $68 million in longs
- $45 million in shorts
For comparison: in the previous cycle, it was $28 million and $15 million, respectively. But the climax came on October 10—a day analysts are already calling an “early Black Friday.”
Within one hour, the market destroyed over $640 million in longs when Bitcoin crashed from $121,000 to $102,000. Open interest collapsed by 22% in less than 12 hours—one of the fastest leverage flushes in Bitcoin’s history. These figures show that risk management is working worse. And accumulated risk is much higher.
Futures are overheated. Open interest at all-time highs
Futures activity has reached a new level. Open interest has approached a historic limit—$67.9 billion, making the market more sensitive to sharp fluctuations.
Daily futures trading volumes reached $68.9 billion, and perpetual contracts account for more than 90% of activity. This means that a significant part of the market operates in high-risk mode, where any movement can trigger a cascade of liquidations.
A characteristic feature of the current cycle: price is formed on spot, while risk is concentrated in futures. After the appearance of spot ETFs, the cash market set the tone, and derivatives amplified every move.
Spot is reviving. Volumes have doubled, but buyers are cautious
Interestingly, the spot market is also keeping pace. Glassnode notes a doubling of daily volumes compared to the previous cycle. The market no longer looks empty—but there is no stable demand either.
During the drop on October 10, hourly spot volume reached $7.3 billion, three times higher than usual peaks. This shows that investors did not flee but aggressively bought the dip. But they did not provide further momentum.
Since the beginning of the year, $40 to $190 billion has entered Bitcoin monthly, pushing realized capitalization above $1.1 trillion—an absolute network maximum. Since the bottom at the end of 2022, $732 billion in new capital has entered the ecosystem—more than in all previous cycles combined.
Bitcoin is becoming a settlement network on the level of Visa
One of the most underestimated factors is the scale of settlements. Over the past 90 days, the Bitcoin network has processed $6.9 trillion—comparable to the volumes of Visa and Mastercard. At the same time, ownership structure is shifting towards institutions. Now 6.7 million BTC are held on the balances of ETFs, corporations, and large treasuries.
Funds alone have absorbed almost 1.5 million BTC in a year. Exchange reserves continue to decline, creating a long-term liquidity shortage.
Main point: the market has become more resilient, but also more dangerous
This cycle is unlike previous ones. Several fundamental differences:
- leverage has grown faster than liquidity
- flushes have become sharper and deeper
- large players have taken most of the supply
- price is formed on spot, while “danger” is in derivatives
- capital inflow has become more institutional
This creates a paradox: the market is stronger than ever, but any imbalance in leverage can trigger a chain reaction that sweeps everything in its path.
Read more: Ether treasuries have sharply reduced purchases: corporate demand for ETH drops by 81 percent
