Cryptocurrency markets headed into the third quarter of 2026 with a notable reset in leverage, but also with noticeably thinner liquidity. A wave of liquidations in Q2 cleared out a large portion of leveraged positioning, even as key demand drivers weakened into the same period, according to Talos data cited in a market update.

That combination—less leverage clearing the system but less depth to cushion future selling—sets up a market that may be less prone to immediate forced cascades, while still capable of sharp price swings when large orders hit thin order books.

Key takeaways

• Q2 liquidation totals were substantial: Talos reports $8.35 billion in combined Bitcoin and Ether long liquidations.
• Derivatives leverage fell: Bitcoin open interest dropped to $33.5 billion (down 32% from its Q2 peak) and Ether open interest fell to $16.2 billion (down 40%).
• Liquidity thinned: Bitcoin order-book depth slipped to roughly $35–$40 million by late June from around $70 million in early May.
• Demand pressures aligned with deleveraging: Talos links the liquidation wave to spot Bitcoin ETF outflows, reduced buying by Strategy, and contraction in stablecoin supply.

Deleveraging cleared leverage, but market depth fell

Talos’ update points to Q2 as a period where speculative positions were largely unwound. Long liquidations for Bitcoin and Ether totaled $8.35 billion, a move that Talos describes as contributing to a more stable environment entering Q3.

However, stability after a liquidation event does not automatically translate into resilience. Talos warns that reduced order-book depth—meaning there is less buy and sell liquidity near current prices—can leave the market less able to absorb renewed selling pressure. In practical terms, fewer resting orders can raise the odds of abrupt moves when market participants try to exit at once.

By midweek, Bitcoin was trading at $58,656, after hitting an intraday low of $57,742. That level was its lowest since Sept. 17, 2024, underscoring how the post-liquidation reset did not eliminate downside pressure.

Open interest drops: a gauge of how much leverage remains

One of the clearest signals that leverage was reduced in Q2 is open interest, which tracks the notional value of outstanding derivatives positions. Talos reports that Bitcoin open interest fell to $33.5 billion, down 32% from the Q2 peak. For Ether, open interest declined to $16.2 billion, a 40% drop.

Lower open interest generally means fewer leveraged bets remain outstanding. That can reduce the likelihood of rapid liquidation spirals if prices move sharply. Still, the other side of Talos’ caution is liquidity: if trading activity remains weak and depth stays shallow, markets can still experience large price swings even without the same level of leveraged positioning.

Stablecoins, order books, and spot volumes: the liquidity picture

Alongside the deleveraging, Talos highlights a market that is trading with less capacity to absorb shocks. Bitcoin’s 2% order-book depth—the aggregate value of orders within 2% of the market price—fell to about $35–$40 million by late June from approximately $70 million in early May.

Spot activity also weakened. Talos reports spot exchange volume declined 28% quarter-over-quarter to $2.32 trillion. When both order-book depth and spot volumes contract, traders often face a market that clears faster but with less friction—meaning fewer participants are absorbing size, and price can move more quickly on incremental flow.

Demand softening: ETF outflows and Strategy’s slower buying

Talos ties the deleveraging period to weakening spot demand during Q2. The report points to spot Bitcoin ETF outflows and reduced Bitcoin purchases by Strategy, alongside a contraction in stablecoin supply.

ETF flows illustrate that demand did not hold steady. Cointelegraph previously reported that US spot Bitcoin ETFs logged $696.3 million in net outflows on June 25. Earlier coverage also noted that June saw roughly $4.5 billion in outflows, which pushed year-to-date outflows to $5.5 billion (as reported by Cointelegraph in links cited above).

Strategy’s buying pace also slowed materially over the same quarter window. Company disclosures cited in the original coverage indicate Strategy purchased about 3,600 BTC in June—down from roughly 25,000 BTC in May and more than 50,000 BTC in April. The same set of disclosures indicated a net sale of 32 BTC earlier in June and a June ending treasury of 847,363 BTC, bought at an average price of $64,103 per coin (details referenced in the cited Cointelegraph links).

The significance for investors and traders is straightforward: when spot demand is weaker, the market has less “natural” buyer absorption during selloffs. That doesn’t guarantee a downtrend, but it can change how quickly prices react to negative catalysts—especially when liquidity is already thinning.

What to watch next: depth, flows, and leverage metrics

The key question heading deeper into Q3 is whether liquidity and demand stabilize at current levels. Talos’ data suggests the market may be less leveraged but also less buffered, so traders should monitor order-book depth, spot volumes, ETF net flows, and open interest for signs of either renewed fragility—or a return of steadier participation.

The EUR/CHF pair is trading within a clear divergence between the two central banks. The ECB raised rates by 25 basis points on 11 June, lifting the deposit rate to 2.40% — its first hike since 2023 — after eurozone inflation climbed to 3.2% in May on the back of the Middle East-driven energy shock. More recent signals suggest easing pressure, though, as falling oil prices following the peace agreement have reduced expectations of a further hike in July.

On the Swiss side, the SNB left rates unchanged at 0.00% on 18 June, while signalling greater readiness to intervene in the currency market to contain excessive franc strength. Despite the ECB’s rate advantage, the franc remains structurally firm below parity, underpinned by its so-called safe-haven status and the still-fragile geopolitical backdrop. A renewed bout of risk-off sentiment could see the franc regain ground even against a higher-yielding euro.

Technical Analysis of EUR/CHF

After bottoming out in March 2026, EUR/CHF has been building a medium-term bullish structure. Price is now testing a pivotal zone, the former support around 0.9240–0.9260, which has since flipped into resistance.

Bullish scenario
The 100-period EMA has been underpinning price for several sessions, while two ascending trendlines reinforce the recent breakout from the descending channel. A confirmed break above the 0.9240–0.9260 zone could open the way toward the next key level near 0.9350, validating a bullish structural shift for the pair.

Bearish scenario
A rejection from the current zone, with price slipping back inside the descending channel it recently broke out of, could reignite stronger bearish pressure and drag the pair back toward the 0.9100 support area.

With both the fundamental and technical picture converging at this decisive juncture, and the next central bank moves still uncertain, will EUR/CHF finally manage to break through this heavily contested zone?

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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.  

According to 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 said 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

At last look on Wednesday, Bitcoin was trading hands at $58.656, after trading earlier in the day to $57,742, its lowest price since Sept. 17, 2024.

Talos said 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, according to 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, according to 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, according to 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.

Magazine: Japanese pension fund tips 1% in crypto, G7 urges action on NK hackers: Asia Express

US-listed spot Bitcoin exchange-traded funds (ETFs) saw another sharp drawdown in June, recording $4.5 billion in net outflows—an amount that vastly exceeds the $1.25 billion Strategy is authorized to raise under its recently announced Bitcoin monetization program.

SoSoValue data updated Wednesday shows the record withdrawals pushed US spot Bitcoin ETFs to about $5.5 billion in year-to-date net outflows for 2026. Even with a still-positive overall position since launch, cumulative net inflows have fallen to roughly $51.2 billion, underscoring cooling investor demand for the product.

Key takeaways

• June’s $4.5 billion net outflows represent the largest monthly outflow figure cited for US spot Bitcoin ETFs in this period.
• That drawdown widened year-to-date net outflows for 2026 to roughly $5.5 billion, according to SoSoValue.
• BlackRock’s iShares Bitcoin Trust (IBIT) accounted for about 79% of June’s withdrawals, with $3.55 billion in net outflows (Farside Investors).
• Despite net inflows rising 4.6% year-over-year, CryptoQuant says ETF holdings remain below year-ago levels and total holdings are now under 1.25 million BTC.
• The scale of ETF outflows highlights a broader mismatch between renewed corporate Bitcoin monetization plans and fund-level investor behavior.

June outflows hit a record, led by IBIT

SoSoValue’s tracking shows June produced $4.5 billion in net outflows from US spot Bitcoin ETFs. The same period saw a heavy concentration in IBIT, which posted $3.55 billion in net outflows—about 79% of the total, according to Farside Investors.

For traders and long-term allocators, this concentration matters. When the majority of withdrawals are coming from a single flagship vehicle, it can signal that institutional allocation decisions are shifting in a coordinated way rather than being spread across the ETF complex. It also means changes in sentiment around the most liquid fund can ripple through broader ETF flow patterns.

Year-to-date flows remain negative even as lifetime inflows persist

The June outflows have pushed US spot Bitcoin ETFs toward a deeper negative 2026 trajectory. SoSoValue data indicates year-to-date net outflows are approximately $5.5 billion, while cumulative net inflows since the funds launched stand at about $51.2 billion.

In other words, the ETFs are not losing their overall historical inflow advantage—but the direction of travel is becoming more challenging. Record monthly withdrawals make it harder for new inflows to offset earlier net selling pressure, particularly if outflows remain elevated beyond a single month.

Holdings trail the year-ago baseline, signaling weaker underlying demand

SoSoValue reports cumulative net inflows into US spot Bitcoin ETFs have increased 4.6% compared with roughly $49 billion a year earlier. However, CryptoQuant’s data suggests that this net inflow picture does not translate into higher Bitcoin holdings at the same point in time.

CryptoQuant head of research Julio Moreno wrote on X on Tuesday that “US-based Bitcoin ETF holdings are now lower than at this same day last year.” He also said that overall demand for Bitcoin is weakening, pointing to total holdings across US spot Bitcoin ETFs falling below 1.25 million BTC.

This distinction—between net inflows and actual ETF holdings—can be crucial for interpretation. Net flow measures can move differently from holdings when redemption and creation activity, custody changes, or other accounting effects alter the timing relationship between “fund flows” and the amount of Bitcoin sitting inside the ETFs. For investors, the practical takeaway is that the balance sheet reality inside the funds is not matching the improved net inflow comparison.

Moreno’s commentary is consistent with the larger message investors may be trying to reconcile: ETFs can attract capital in aggregate while still losing BTC exposure year-over-year, which is often a sign that demand is not as resilient as headline inflow numbers imply.

Strategy’s $1.25 billion authorization runs into ETF outflows of a larger magnitude

Against this backdrop, Strategy announced a Bitcoin monetization program earlier this week. The company said it would seek authorization to raise up to $1.25 billion, framed as part of a broader capital framework intended to support dividend obligations tied to its preferred securities. The move was widely interpreted as responding to funding pressure within Strategy’s capital structure.

Community reactions were mixed. Some investors viewed the plan as financial flexibility, while others questioned the long-term sustainability of the new structure and argued it could lead to selling more Bitcoin than the initial authorization amount suggests.

In market reaction, Strategy’s Class A common stock (MSTR) initially rose as much as 12% above $90 after Monday’s announcement, according to Yahoo Finance, before reversing course and closing at $86.93 on Tuesday, down 6.2% on the day. Strategy’s preferred stock (STRC) traded higher at $84.86 on Tuesday, as reported by Yahoo Finance.

What stands out for readers is the scale mismatch between the corporate financing target and the ETF market’s behavior. June’s $4.5 billion in US spot ETF net outflows is more than three times the $1.25 billion Strategy is authorized to raise. While the two are not directly comparable in mechanism—corporate monetization versus retail/institutional ETF allocations—the comparison helps frame an important tension: renewed corporate efforts to manage capital around Bitcoin exposure are occurring as ETF-level demand is showing clear signs of cooling.

Going forward, investors will likely watch whether the ETF flow weakness is a temporary dip or a continuing trend—especially given CryptoQuant’s warning that ETF holdings remain below year-ago levels. If outflows persist, Strategy’s monetization plan may become part of a wider debate about where incremental Bitcoin demand will ultimately come from.

A MiCA license issued in any EU country gives the holder access to the entire 27-nation bloc as well as Iceland, Liechtenstein, and Norway. That means Polish companies are likely to apply in countries such as Lithuania, Latvia or Germany before passporting their services back home.

“The business simply moves somewhere else,” Wojciech Kaszycki, chief strategy officer of Warsaw-based fintech BTCS, told CoinDesk in a video interview. “None of the Polish companies can receive the authorization in Poland.”

Nawrocki says the law, which he rejected for a third time earlier this month, gives regulators excessive powers, including the ability to block crypto companies’ websites and impose rules that could push businesses abroad. He’s also said it favors banks and large corporations over startups while creating an overly complex regulatory framework.

Kaszycki said he agreed with Nawrocki’s criticism that parts of the law went beyond MiCA itself. The draft, which has been passed by both houses of parliament, allows the Financial Supervision Authority (KNF) to freeze customer funds for months and block websites before companies have exhausted legal appeals.

Mateusz Kara, CEO of Morphic Financial Group, headquartered in London and with deep roots and operations in Poland, said the cost of a MiCA license and the political deadlock could “wipe out Polish crypto.”