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Leverage Cleaning in Bitcoin and Cryptocurrencies: Historically a Rally Messenger! - Coin Bulletin
**Bitcoin (BTC) being stuck in the leveraged positions being rapidly liquidated in the market may open the door to new opportunities for investors.
According to CryptoQuant analyst, Bitcoin and cryptocurrencies have been going through a major deleveraging (leverage cleanup) process in recent weeks. On January 17th, Bitcoin's open interest exceeded $33 billion, reaching an all-time high. However, due to the panic environment caused by political decisions of the Trump administration, a significant liquidation occurred in leveraged positions.
In the last two months, $10 billion has been wiped out from Bitcoin's open positions, with $10 billion between February 20 and March 4 alone. This period is considered a natural market reset phase that reduces excessive leverage in the market and is emphasized as a healthy stage for the continuity of the bull market.
According to the data, the 90-day open position change in the Bitcoin futures market turned negative by 14%. Analyst Darkfost points out that such leverage clearing periods have historically provided significant investment opportunities in the short and medium term. Historically, it has been observed that after similar processes, the price of Bitcoin entered an upward trend. Therefore, investors are advised to closely monitor opportunities in the market.