Crypto Short Squeeze: $163 Million in Shorts Liquidated

After a relatively stable period, the cryptocurrency market experienced a sudden and volatile trading session, causing major losses for traders betting on a downtrend. According to data from Coinglass, a total of $225 million in leveraged positions were liquidated across the network in the last 24 hours, a figure that shows the ferocity of the derivatives market.

However, the highlight of this event was the massive discrepancy between the two sides. While long positions (bets on a price increase) saw just $62.59 million in liquidations, short positions (bets on a price decrease) suffered a staggering $163 million in losses—nearly three times as much. This imbalance indicates a textbook 'short squeeze' scenario, where a sharp and sudden asset price increase forces short-sellers to close their positions by buying back the asset, which in turn creates a feedback loop that pushes the price even higher. As a result, 84,812 traders globally were liquidated.

The epicenter of this squeeze was Bitcoin. Data shows the BTC market witnessed overwhelming devastation for the bears, with $59.14 million in short positions liquidated compared to only $8.43 million in longs. This nearly 7-to-1 ratio shows that Bitcoin's price move was the primary driver of the market-wide shock. The largest single liquidation also occurred on the BTCUSDT pair on Binance, where a position worth up to $12.20 million—almost certainly a short—was wiped out.

The Ethereum market saw a similar scenario, albeit less severe, with $30.98 million in shorts liquidated versus $23.06 million in longs. This further reinforces the assessment that Bitcoin was the main driver of this volatile event.

This large-scale 'short squeeze' is another stark reminder of the risks of using high leverage in a market as unpredictable as crypto. It shows that bearish sentiment can be punished swiftly, and the mass liquidation of short positions can create some of the most powerful and unexpected upward price movements.