Bitcoin (CRYPTO: BTC) may be showing early signs of renewed positioning, even as the market continues working through a major deleveraging phase.

What Made It a Profitable Cycle?

In a detailed thread on X on Aug. 13, CryptoQuant founder and CEO Ki Young Ju said Bitcoin’s “OG traders” had experienced their most profitable cycle ever, aided by a major shift in who absorbed selling pressure.

Unlike previous cycles, exchange traders weren’t the primary “exit liquidity,” according to Ju.

Instead, demand from spot ETFs and DATs absorbed significant supply.

That structural demand helped push unrealized profits among Binance traders to nearly three times the levels seen at the 2021 market top.

Those gains, however, also fueled significant leverage.

Ju said Bitcoin is trading around the same price range as two years ago because the market is now undergoing a deleveraging process.

“This cycle’s massive, unrealized gains flowed straight into futures leverage,” he said, adding that profit-taking has brought Bitcoin back toward the average cost basis of Binance traders.

Bitcoin Leverage Still Elevated

Ju pointed to BTC/USDT futures open interest relative to USDT exchange reserves as a gauge of market leverage. The ratio climbed above 0.5 at its peak before falling toward 0.3 as leverage was flushed from the system.

Despite that decline, leverage remains above pre-ETF levels, a structural change Ju doesn’t expect to be fully reversed.

If spot Bitcoin ETF inflows strengthen again, he expects futures leverage to eventually rise alongside them.

That could create the conditions for larger price swings as institutional spot demand combines with increasingly aggressive derivatives positioning.

Are Bitcoin OGs Going Long Again?

Ju also highlighted potentially bullish activity from experienced Bitcoin traders.

During Bitcoin’s 2023 cycle bottom near $16,000, OG whales took aggressive long positions as reflected by a sharp increase in the taker buy/sell ratio.

Similar spikes in taker buying have recently appeared on OKX and other exchanges which indicates that some veteran traders are positioning bullishly again.

However, he cautioned against treating the metric as confirmation that Bitcoin has already established its cycle bottom.

Instead, the taker buy/sell ratio provides a window into the positioning and sentiment of large, experienced market participants.

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