SKN | Daily Crypto Liquidations Nearly Triple as Leverage Overheats, Glassnode Warns

Crypto markets are facing one of their most aggressive leverage buildups to date, with daily liquidation totals nearly tripling compared with the previous cycle. A new report from Glassnode and Fasanara shows how deeply derivatives now influence Bitcoin’s price action — and how quickly that leverage can unwind.

Leverage Surges and Liquidations Triple This Cycle

Average daily futures wipeouts rose sharply this cycle, climbing to $68 million in long liquidations and $45 million in short liquidations, up from $28 million and $15 million respectively during the last cycle.

The most dramatic moment came on Oct. 10, in what researchers labeled “Early Black Friday.” As Bitcoin fell from $121,000 to $102,000, long positions were wiped out at a pace exceeding $640 million per hour. Open interest collapsed 22% in under 12 hours — one of the fastest deleveraging events in Bitcoin’s history.

Futures markets have expanded significantly, with open interest hitting a record $67.9 billion. Futures trading volumes surged as high as $68.9 billion per day in mid-October, with perpetual contracts making up over 90% of activity.

Spot Market Grows as ETFs Shift Price Discovery

Even as derivatives balloon, Bitcoin’s spot market has also scaled higher. Daily spot volume has doubled from prior-cycle levels, now regularly landing between $8 billion and $22 billion.

During the Oct. 10 sell-off, hourly spot trading volume spiked to $7.3 billion, more than triple recent highs — a sign that buyers stepped in as prices fell rather than retreating from the market.

The report attributes this shift to U.S. spot Bitcoin ETFs, launched in early 2024, which have re-centered price discovery around the cash market while leverage builds inside futures. This dynamic has contributed to Bitcoin’s growing market dominance, rising from 38.7% in late 2022 to 58.3% today.

Massive Capital Inflows Support a More Institutional BTC Market

Capital flows reflect a structurally different market landscape. Monthly inflows into Bitcoin now range from $40 billion to $190 billion, lifting its realized cap to a record $1.1 trillion. Roughly $732 billion has entered the Bitcoin network since the 2022 bottom — exceeding the combined inflows from all prior cycles.

Glassnode labeled this shift as evidence of a “more institutionally anchored and structurally mature market environment.”

The current cycle is measured from the November 2022 market low to today, while the previous cycle refers to behavior spanning the 2021 bull market through the 2022 collapse.

Bitcoin Now Rivals Visa as a Settlement Network

Beyond markets, the report highlights Bitcoin’s growing role as a global settlement system. Over the past 90 days, Bitcoin processed $6.9 trillion in transaction value — surpassing payment giants Visa and Mastercard.

Meanwhile, Bitcoin supply continues migrating from retail venues into institutional channels. Approximately 6.7 million BTC is now held across ETFs, corporate treasuries and centralized and decentralized entities.

Since early 2024 alone, ETFs have absorbed about 1.5 million BTC, while exchange-held balances have steadily declined.