Written by Ezra Reguerrastaff writerReviewed by Yohan Yunstaff writer
Written by Ezra Reguerrastaff writer
Reviewed by Yohan Yunstaff writer
Crypto enters Q3 with thinner liquidity but less leverage after Q2 reset: Talos
Latest NewsPublishedJul 1, 2026
Bitcoin and Ether open interest fell sharply after $8.35 billion in long liquidations, while ETF outflows, weaker Strategy purchases and declining market depth reduced liquidity.
Cryptocurrency markets entered the third quarter of 2026 with less leverage but thinner liquidity after a wave of liquidations cleared speculative positions while major sources of demand weakened during the second quarter.
as reported by a market update from institutional data provider Talos, Bitcoin (BTC) and Ether (ETH) long liquidations totaled $8.35 billion in Q2. The data provider pointed out that the deleveraging coincided with spot Bitcoin exchange-traded fund (ETF) outflows, reduced Bitcoin buying by Strategy and a contraction in stablecoin supply.
While the reset left the market more stable heading into Q3, Talos stated reduced order-book depth weakened its ability to absorb renewed selling pressure. This means the market could be less vulnerable to a chain reaction of forced selling, but prices may still swing sharply because there’s less trading activity to absorb large orders.
Cross-asset performance chart. Source: Talos
Talos stated the liquidation wave reduced the amount of leveraged money in the market. Bitcoin open interest, which measures the value of outstanding derivatives contracts, fell to $33.5 billion, down 32% from its Q2 peak, while Ether open interest dropped to $16.2 billion, a 40% decline, as reported by the data provider.
Related: Swan’s Cory Klippsten sees record Bitcoin holder supply revealing early bottom
To be sure, the market became less liquid: Bitcoin’s 2% order-book depth, the value of buy and sell orders close to its market price, fell to between $35 and $40 million by late June from about $70 million in early May. Spot exchange volume also declined 28% quarter-over-quarter to $2.32 trillion, as reported by Talos.
ETF outflows and Strategy slowdown weigh on demand
Weakening demand was evident before the end of Q2. US spot Bitcoin ETFs recorded $696.3 million in net outflows in a single day on June 25. In total, June recorded about $4.5 billion in outflows, pushing year-to-date totals to $5.5 billion.
Strategy also purchased roughly 3,600 BTC in June, down from about 25,000 BTC in May and more than 50,000 BTC in April, as reported by company disclosures. The company also recorded a net sale of 32 BTC earlier in June and ended the month with 847,363 Bitcoin in its treasury, purchased at an average price of $64,103 apiece. At last look on Wednesday, the biggest crypto was trading hands at $58.656.
Magazine: Japanese pension fund tips 1% in crypto, G7 urges action on NK hackers: Asia Express
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.
- Data
- ETF
- MicroStrategy
- Bitcoin
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