Analyst: Binance's Highest Liquidation Volume Since 2021 Signals a New Wave of Deleveraging

November 12: CryptoQuant analyst Darkfost wrote that Binance has recorded its highest liquidation volume since 2021, signaling a new wave of deleveraging. In less than a month, Binance's BTC open interest fell from $10.6 billion to $8.8 billion, a 17% decline, while its 180-day moving average rose from $8.4 billion to $8.6 billion. As open interest falls below the moving average, a new deleveraging signal is emerging.

Darkfost noted that during bull market phases, this signal usually appears at the end of a pullback, reflecting traders reducing leveraged exposure through voluntary position closures or liquidations. Over the past three months, Binance recorded its highest monthly liquidation totals since 2021: over $1.4 billion in August, $1.1 billion in September, $1.3 billion in October, and with November not yet halfway through, liquidations have already exceeded $520 million. According to the analysis, low volatility has prompted some traders to take on more risk, while a reduction in leveraged positions can lower the risk of cascading liquidations, creating the conditions for spot demand to play a greater role.