Binance Bitcoin open interest climbed to a three-month high before the leverage cycle turned, with CryptoQuant data now flagging a flush of long positions as BTC/USD probes new August lows.
OI Builds, Then Breaks: How the Leverage Stack Unwound
The setup had been building for weeks. According to a CryptoQuant quicktake, Binance Bitcoin open interest reached approximately $9.54 billion, a three-month high, as leveraged positioning accumulated during a period of compressed spot activity. A separate snapshot from Wednesday put OI at $8.15 billion, the difference likely reflecting different measurement windows as the figure moved through a multi-day peak.
The stablecoin-margined slice tells a similar story. A CryptoQuant report noted that stablecoin-margined Binance BTC open interest reached $4.78 billion on 25 August, clearing the previous cycle high of $4.74 billion set on 14 May. The margined OI had been recovering steadily: a CryptoQuant quicktake recorded the 30-day OI change recovering to +6,380 BTC by 15 August after crashing to -14,280 BTC on 6 July, a swing of approximately 20,700 BTC from the July low.
That recovery proved to be leverage returning, not a structural bid. With BTC price trading in a narrow band since June while OI inflated, the correlation between price and open interest began to fracture. CryptoQuant community analyst BorisD noted the correlation reading hit 0.25, a reading that reflects simultaneous declines in both price and OI.
‘In the Bitcoin market, the Binance Open Interest (OI) Correlation and liquidation warning signals clearly reveal the process of leveraged positions being flushed out. Initially, as the price fell, the correlation shifted to the negative side, indicating that OI was rising despite declining prices,’ BorisD wrote on CryptoQuant.
The analyst described the dynamic as a ‘double-sided squeeze’: longs buying the dip while fresh short positions entered simultaneously, creating a complex liquidity structure. Once both price and OI started declining together, the interpretation shifted: ‘The simultaneous drop in both price and OI indicates that leveraged long positions are giving up, getting stopped out, or facing liquidation.’
CoinGlass put total 24-hour cross-crypto liquidations at $236 million at the time of writing.
CryptoQuant’s Cycle Indicators Stay Bearish, With One Dissent
The broader cycle picture from CryptoQuant is not offering longs much comfort. As reported by NewsBTC via TradingView, CryptoQuant’s Bull Score Index spent Q4 2025 and Q1 2026 in bearish territory. The index is considered bullish when above 60 (more than six component metrics pointing positive) and bearish when below 40.
CryptoQuant CEO Ki Young Ju has put a timeline on the pain. Bitcoin.com News reports Ju as saying investor aggregate PnL typically falls for around 18 months after a profit-taking cascade, and that with the downtrend beginning in October 2025, the bear phase could extend until early 2027. ‘The stars haven’t aligned for a Bitcoin bull run just yet,’ he wrote on X.
There is one reading that cuts against that call. Bitcoin.com News also reports that CryptoQuant’s Bull-Bear Cycle Indicator turned green on 12 May for the first time since March 2023, a signal that has historically coincided with the start of more constructive market conditions. Ju’s own platform is, in that sense, sending mixed signals.
On the OI side, the 30-day stablecoin-margined open interest change on Binance reached +$840 million on 27 August, compared with +$298 million on Gate over the same period, according to Binance Square. That Binance-specific leverage concentration is precisely what makes the current flush more acute: the position build was not spread across venues.
The binary now is whether the cleanout in longs is complete or whether a deeper sweep toward August’s range lows is needed to clear the remaining overhang. Watch the OI correlation: a return above 0.5 with price stabilising would suggest the flush is largely done.
