Bitcoin The most powerful surge in two years, driven almost entirely by the air.

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A recent report released jointly by analyst firms Glassnode and crypto exchange showed that Bitcoin recorded its strongest rally in August since the two-year retracement period, but it was not a new increase of long position that drove this rally, but rather short position 's liquidation . The report reveals the profound impact of leverage market structure on price movements and also raises an unresolved question: Can the 8th market reset continue?

24.6% increase in five days, 12.6% decrease in outstanding contracts

The report notes that over five trading days in August, the price of Bitcoin surged 24.6%, while unfilled contracts priced at par value fell 12.6% on an indicator measuring active leverage levels. This combination is a key signal: market conditions are not driven by traders' influx into new long position , but rather from passive liquidity of stock short position .

According to statistics, about 64,000 Bitcoin corresponding unsettled contracts were cleared during the period and of all liquidated funds, short position contributed 89%.

Options markets move in sync, 361-day bear premium ends

Options markets have confirmed the same story: bearish options - contracts that traders use to hedge against downside risk - had previously been priced higher than bulls for 361 consecutive days. This record was broken on just one trading day, when the market reversed a nearly year-long pattern of declines in its rush to revaluate.

In addition, Bybit 's proprietary volatility index was four times more volatile than the typical daily average over a single trading day; near-end futures curves were heavily revalued while forward contract prices remained almost static indicating that markets interpreted this turnaround as a one-off event rather than a change in trend pattern.

Data caliber and follow-up

It should be noted that the report was completed by Glassnode in conjunction with Bybit , and data were settled as of August 23. The statistics for Glassnode cover four crypto-native options exchanges, which are not included in the CME, so the relevant figures reflect the situation on the crypto native market rather than all locations where Bitcoin transactions took place.

Notably, the head-squeezing dynamics tracked in the report did not disappear. This week, Bitcoin resumed at the $80,000 threshold after the Federal Reserve announced its first rate hike since 2023 and accompanied a hawkish forecast.

The rally triggered another round of squeezes, with over $230 million cleared in a single day and more than $445 million total liquidated across the entire market. CoinGlass data showed that about $529 million was settled within 24 hours, most of which still came from empty hands.

It's unclear if the re-pricing in August will continue.

The report's authors point to the openness behind the data: whether market revaluations in August will continue. If there is a true reversal of trend, it would appear as a bias towards maintaining bullish/bullish prices and holding firm near the futures curve; on the contrary, if bearish option premiums return, funding rate gradually fades away, indicating that this is just an event that has been digested by the market rather than the beginning of a new pattern.

Risk tip: cryptocurrency The market is volatile, and the risk of leverage trading is very high. This article is for informational purposes only and does not constitute any investment advice.