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- A massive Bitcoin long squeeze on Binance wiped out overleveraged buyers, clearing $70M in late positions.
- Open interest and taker volume dropped sharply, setting up structurally healthier conditions for potential upside.
Bitcoin has experienced a flash crash, hitting $111,000 in recent hours, sparking both concern and curiosity among investors: what’s really going on behind the scenes? Apparently, the main answer is one: a massive long squeeze on Binance.
Data from on-chain analyst Amr Taha at CryptoQuant reveals that over $70 million in long positions have been brutally liquidated, wiping out liquidity below $112,000 and leaving the market in a state that could be described as empty.
According to Amr Taha, over 112,000 long contracts on Binance were forced to close due to the price falling too far. This liquidation wasn’t just a minor correction. It was a moment when overly leveraged—and perhaps overconfident—traders were no longer able to meet margin requirements.
The exchange’s automated system executed the closing of their positions through aggressive sell orders. The result? A domino effect that accelerated the price decline.
But beneath the chaos, there was an interesting signal. Open interest immediately plummeted after the wave of liquidations, indicating that the market has now cleared out overly speculative positions.
In fact, Binance data shows cumulative net taker volume falling to minus $1 billion. This means that selling power is dominating without significant resistance from buyers. But it is precisely at times like this that the potential for a recovery usually begins to take shape.
Bitcoin Miners and Big Wallets Are Quietly Reshaping the Market
On the other hand, Bitcoin miners also appear to be playing a role in this round. In the past 24 hours, more than 5,066 BTC—worth over $565 million—were moved from mining wallets to off-chain.
This is the largest daily outflow in the past eight months. This moment comes just days after the BTC price dropped nearly 10% from its peak of $123,731 reached on August 14th.
What does this have to do with the potential for a rebound? It’s not just the actions of derivatives traders that are important. The actual tradable supply of BTC is now at a much lower level than many had anticipated.
The CNF reported a few days ago that most Bitcoin is currently locked in large institutional wallets and dormant wallets. So, while the price appears to be fluctuating, the amount of Bitcoin actually available on the market is much smaller.
Amr Taha believes that with overleveraged buyers having been wiped out and open interest returning to baseline levels, the market structure is healthier.
There has been no pressure from a short squeeze so far, but this actually creates room for price increases if BTC manages to reclaim key levels. It’s as if all the noise has been cleared away and is just waiting for a new spark for the next rally.
It’s not just retail investors who need to reflect. Large players, from miners to institutions, appear to be reorganizing their positions.
