In brief

• Over five days in August, Bitcoin rose 24.6% while coin-denominated open interest fell 12.6%, meaning the rally ran on unwinding short positions rather than fresh bullish bets.
• The options market flipped after 361 straight days of puts pricing richer than calls, and the front of the futures curve repriced while the long end held—signs of a one-off event, not a regime change.
• The data comes from a joint Glassnode-Bybit with numbers through August 23, covering four crypto-native venues, excluding CME.

Bitcoin's most violent rally of its two-year drawdown wasn't powered by fresh bullish bets. It was powered by bears getting crushed, according to a new report from analytics firm Glassnode and crypto exchange Bybit.

Over five days in August, Bitcoin climbed 24.6% even as coin-denominated open interest, a measure of active leverage, fell 12.6%, the report found. That combination is the tell: rather than traders piling into new long positions, the move ran on the forced unwinding of existing shorts.

Roughly 64,000 BTC worth of open interest was closed out, and short positions supplied 89% of every liquidated dollar during the stretch.

The options market told the same story. Puts, the contracts traders buy to protect against a fall, had priced richer than calls for 361 straight days. A single session ended that run, flipping roughly a year of downside positioning as the market scrambled to reprice.

Bybit's own volatility index traveled four times its normal daily range in one session, and the front of the futures curve repriced sharply while longer-dated contracts barely moved, a sign the market read the move as a one-off event rather than a lasting regime change.

A few caveats are worth stating plainly. The report is a Glassnode and Bybit collaboration, with data as of the settled close of August 23, and Glassnode's coverage spans four crypto-native options venues, excluding CME, so the figures describe the crypto-native market rather than every venue where Bitcoin trades.

The dynamic tracked in Glassnode’s report hasn't gone away either. Bitcoin blasted back above $80,000 this week after the Federal Reserve paired its first rate hike since 2023 with a dovish forecast.

The surge triggered another squeeze, liquidating more than $230 million in Bitcoin shorts and over $445 million across the market in a single session. CoinGlass data showed roughly $529 million in total liquidations over 24 hours, the majority again from shorts.

The report's authors flagged the open question their own data raises: whether August's repricing sticks. A durable shift would show up as skew holding call-bid and the front of the curve staying firm. A return of put premium alongside fading funding would instead mark it as an event the market absorbed, not a new regime it entered.