Woofun AI reports that the recent Bitcoin rally, which previously squeezed short sellers, has reversed course to aggressively target leveraged longs.

This shift marks a distinct change in market positioning, moving from short-covering rallies to a forced deleveraging of long positions.

The price action drove significant liquidation volumes, with Bitcoin accounting for $38.66 million in four-hour long liquidations and $55.82 million over the preceding 24 hours. BTC traded near $76,088, representing a 1.8% decline from the prior day after briefly approaching $80,000 during the earlier surge. Since that low, the asset has recovered slightly to trade near $77,300, confirming a sharp rotation in who was being forced out of the market.

Structurally, the washout extended beyond Bitcoin, with Binance recording $65.02 million in total crypto liquidations over a four-hour window, including $58.64 million in longs.

Notably, the largest single order in the 24-hour period was an $11.72 million ETHUSDT liquidation on Binance.

Woofun AI data shows that this broader cleanup is reducing open interest, indicating that leverage is shrinking during the pullback rather than accumulating.

Spot ETF demand serves as a critical counterweight to a purely derivatives-driven narrative. The Aug. 23 snapshot captures a long flush that has already diminished open interest, suggesting that evidence of the next crowded long trade must emerge through future expansions in leverage or funding. Until such signals appear, the current data describes a cleanup of existing risk, with Monday's reopened ETF channel providing the next test for spot demand.