Binance Records Highest Liquidation Volume Since 2021, Signaling a New Wave of Deleveraging

Binance has recorded its highest liquidation volume since 2021, indicating a new wave of deleveraging. Within less than a month, the open interest of BTC on Binance dropped from $10.6 billion to $8.8 billion, a decrease of 17%, while its 180-day moving average rose from $8.4 billion to $8.6 billion. The open interest has fallen below the moving average, signaling the emergence of new deleveraging trends. Analysts point out that this signal typically appears at the end of pullbacks during bull markets, reflecting traders reducing leverage exposure due to voluntary liquidations or forced liquidations. Over the past three months, Binance has recorded the highest monthly liquidation total since 2021: over $1.4 billion in August, $1.1 billion in September, and $1.3 billion in October, with more than $520 million liquidated in November before the month is even halfway through. Analysts believe that low volatility has prompted some traders to take on more risk, while the reduction in leveraged positions can lower the risk of cascading liquidations, creating conditions for greater spot demand.

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