Bitcoin Traders Have Borrowed Into a Falling Market 5 Times Since October. How Did the First 4 End?

Bitcoin (CRYPTO: BTC) traders have borrowed into a declining market five times since early October, Bitfinex analysts say. Each of the first four ended in more than $800 million in liquidations of long positions. The latest wave of borrowing began after Bitcoin closed its fifth consecutive losing week at $74,754 on November 8, 2026. On November 10, Bitcoin trades at $73,227, down 2.6% over the past 24 hours and 5.6% for the week.

Leverage involves borrowing money to increase trade size. A trader puts up a small amount of their own funds, known as collateral, while the exchange lends the rest, allowing the trader to control more Bitcoin than they could with their deposit alone.

When traders borrow to purchase Bitcoin while prices are falling, it may seem like a show of confidence, as many believe they’re buying at a low point. So does this fifth round of Bitcoin leverage signal a bottom, or is it setting the stage for outcomes similar to the previous four rounds?

Offshore Traders Are Borrowing More as CME Open Interest Falls 15%

Bitfinex analysts raised concerns based on changes in open interest, which refers to the total number of futures contracts still active. They observed that open interest in Bitcoin futures on CME Group (NASDAQ: CME | CME Price Prediction) dropped about 15% between November 3 and November 8, while offshore positions increased. The CME is the regulated futures market for U.S. traders, suggesting that larger institutional players are reducing their exposure to Bitcoin.

On the OKX platform, open interest in Bitcoin perpetual contracts, futures that do not expire and that traders often hold with borrowed funds, rose to 36,220 BTC (approximately $2.65 billion) on November 10, up from 35,499 BTC the previous day. Rising open interest in a declining market typically indicates new long positions, which can benefit traders if prices recover. A similar pattern was also evident earlier this month on the Hyperliquid exchange.

Every Borrowed Long Carries a Forced-Sale Price

Each borrowed position comes with a liquidation price, the point at which losses reduce collateral to the extent that the exchange automatically sells the position to cover the borrowed funds. In a declining market, these forced sales can add to downward pressure, pushing prices closer to the next group of liquidation levels. Bitfinex analysts noted this chain reaction drove the outcomes of the first four borrowing episodes.

However, open interest doesn’t clarify who holds which side of the trade. Each futures contract involves a buyer and a seller, so rising open interest can indicate either new long or short positions. Bitfinex interprets the current situation as weighted toward long positions, while OKX’s data represents only part of offshore market dynamics.

Analysts from Bitfinex pointed out that November 8 marked the first close below the short-term holder cost basis of $75,893 during this uptrend, with Bitcoin now trading about 3.5% below that level. This cost basis represents the average price paid by recent buyers, and since many are holding losses, they have been selling to cut those losses.

Additionally, a price rally previously stalled at $81,300 as October buyers exited at breakeven, mirroring the pressure seen when recent buyers hovered near breakeven in October.

Past Five-Week Losing Streaks Came in Bear Markets

Bitfinex analysts put the median move four weeks after past five-week losing streaks at a 14.1% decline. However, Bitfinex’s November 9 report indicates that all previous streaks recorded occurred during bear markets or capitulation phases, and the analysts still read the current decline as a correction. Thus, these historical patterns may apply only if this pullback transitions into a bear market.

Stocks and the November 13 Options Expiry Could Set the Next Move

Stock market movements are likely to influence Bitcoin’s trajectory this week. Bitfinex reports a strong correlation of 0.72 between Bitcoin and the Nasdaq-100 Index, where 1.0 indicates a perfect correlation. Their analysis links the recent decline to a post-midterm sell-off in AI stocks ahead of an anticipated CPI inflation report.

Options traders expect limited movement for Bitcoin this week. Bitfinex noted, “We expect bitcoin to trade within the $72,350 to $79,400 range implied by options for the 13 November expiry, and to spend most of the week in its lower half.” Bitcoin is currently just 1.2% above the lower end of that range.

Moving averages, which track average closing prices over specific periods, align with this prediction. Bitcoin is trading 6.9% below its 20-day average of $78,621 and 10.3% below its 50-day average of $81,641. It is also barely above its 200-day average of $73,162, the long-term trend indicator, meaning a drop to the $72,350 mark could break this key level.

Is This Fifth Round of Bitcoin Leverage a Signal for a Bottom?

Right now, the market doesn’t appear to be gearing up for a rebound. The latest futures data shows leverage hasn’t cleared and steadier money hasn’t returned, suggesting this borrowing round may simply add pressure for another drop. Key points to watch are CME open interest starting to rebuild and OKX perpetual open interest dipping below 35,499 BTC, signaling that borrowed long positions have cleared out.

For Bitcoin’s price, a weekly close over $75,893 would be a positive sign, while a move below $72,350 would confirm a bearish outlook. The first four episodes of leverage in a declining market led to similar consequences.

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