Bitcoin's 24.6% August Surge Was Mostly Short Sellers Being Forced Out, Report Finds
Glassnode and Bybit data show open interest falling as the price climbed, with shorts accounting for 89% of liquidated dollars — and the same pattern reappearing when Bitcoin broke $80,000 this week.
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Bitcoin's sharpest rally since its two-year drawdown began was driven less by traders betting on gains than by short sellers being forced out of losing positions, according to a report published by analytics firm Glassnode and exchange Bybit.
Across five trading days in August, Bitcoin gained 24.6% while open interest measured in Bitcoin — a gauge of how much leverage is actually deployed — dropped 12.6%. When price rises and leverage shrinks at the same time, new long positions are not doing the heavy lifting. Existing shorts closing out are. About 64,000 BTC of open interest was shut over the stretch, and shorts made up 89% of all liquidated dollars in that window.
The options market recorded the same shift. Puts, contracts that let traders hedge against a price drop, had commanded a premium over calls for 361 consecutive days. One session erased that streak, unwinding close to a year of defensive positioning as the market rushed to price in the new reality.
Volatility spiked harder still. Bybit's volatility index swung through four times its usual daily range in a single session. The front of the futures curve repriced sharply while longer-dated contracts barely budged, which the report reads as the market treating the move as a discrete shock rather than the start of a sustained upswing.
The caveats
The dataset has limits the report itself acknowledges. Figures are current to the settled close of August 23, and Glassnode draws its options coverage from four crypto-native venues — CME is excluded — so the numbers describe the crypto-native market, not the full universe of Bitcoin trading.
Nor has the pattern vanished since August. Bitcoin climbed back above $80,000 this week after the Federal Reserve announced its first rate hike since 2023 alongside a forecast that leaned dovish. The move set off a fresh squeeze: more than $230 million in Bitcoin shorts were liquidated, and over $445 million across the whole market, in one session. CoinGlass tallied roughly $529 million in total liquidations over 24 hours, with shorts again supplying the bulk.
The open question the report leaves hanging is whether August's repricing lasts. Its authors point to two markers: if put-sell skew holds and the near end of the futures curve stays firm, the shift was durable. If put premium returns while funding fades, the episode goes down as a shock the market absorbed rather than a regime it entered.
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