Analysis: Bitcoin Underwent Its Sharpest Deleveraging Since 2023, CryptoQuant Analyst Says

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The Bitcoin market has just come through its most intense deleveraging phase since 2023, according to an analysis by on-chain analyst Darkfost.

In a CryptoQuant post on September 7, Darkfost wrote that Bitcoin had "just gone through the strongest deleveraging phase since 2023." In a cycle dominated for an extended period by futures trading volume, the recent correction was a process of flushing out accumulated leverage.

That was evident in a sharp drop in Bitcoin open interest on Binance, the world's largest digital-asset exchange. Darkfost said open interest fell far below its 180-day moving average, underscoring the speed and severity of the deleveraging.

He described the move as a necessary correction for the Bitcoin market. During a correction, excessively crowded positions are either forcibly liquidated or closed through investors' stop-loss selling. Across both long and short positions, Bitcoin experienced one of the largest liquidation events in its history during this cycle.