A joint report from Glassnode and Bybit reveals that the 24.6% Bitcoin rally observed over five days in August was driven by the liquidation of short positions rather than new bullish bets. During this period, coin-denominated open interest declined by 12.6%, with approximately 64 000 BTC in open interest closed out. Short positions accounted for 89% of all liquidated capital during the surge.
The options market also shifted, ending a 361-day streak where put options were priced higher than calls. Bybit’s volatility index reached four times its typical daily range in a single session. The futures curve saw significant repricing at the front end, while longer-dated contracts remained relatively stable, suggesting the market viewed the event as a temporary occurrence rather than a long-term shift.
The data covers four crypto-native venues, excluding CME, with figures current as of August 23. Recent market activity saw Bitcoin rise above $80 000 following Federal Reserve policy updates. This movement triggered further liquidations, with over $230 million in Bitcoin shorts and more than $445 million across the broader market liquidated in a single session, according to CoinGlass.
Analysts note that the durability of this repricing remains uncertain. A sustained market shift would require call-bid skew to hold and the front of the futures curve to remain firm. Conversely, a return of put premiums alongside fading funding rates would indicate that the market has simply absorbed the event without entering a new structural regime.
