$113M Crypto Short Liquidations Fuel Bitcoin and Ethereum Squeeze
Crypto short liquidations accelerated from a Bitcoin-led squeeze on September 3 to a broader derivatives event by October 5, 2026. Coinglass reported $113 million in crypto short liquidations over 24 hours, accounting for most of the roughly $138 million total. Long liquidations reached $25.16 million, while more than 42,225 traders were affected.
Bitcoin led the latest losses, with $57.07 million in BTC shorts liquidated. Ethereum followed with $24.04 million, including a $5.63 million ETHUSDT short on Binance. The forced buying that closes short positions can create a feedback loop, adding upward pressure and triggering further crypto short liquidations.
The October event was larger than the $47.5 million in Bitcoin shorts liquidated within one hour on September 3, but remained below the more than $2.7 billion wiped out during the August 19–20 squeeze. A similar $113 million short-liquidation wave occurred in July 2026, when Ethereum rose 4.5% towards $1,980 amid Ethereum ETF inflows.
Traders should monitor funding rates, open interest, spot volume and whether leveraged short positions rebuild. Rising short interest could support another squeeze, while falling open interest may show that positioning has reset and volatility is easing. High leverage remains a risk: a 20x Bitcoin short can be liquidated after a 5% rise, while a 50x position may fail after a 2% move.
Bullish
The immediate price impact is bullish for Bitcoin and Ethereum because forced short closures require exchanges to buy the underlying assets. The October event shows that bearish positioning remained concentrated, with BTC and ETH accounting for most major liquidations. This can extend an upward move in the short term and raise the risk of additional short squeezes if funding rates and open interest show renewed short accumulation.
However, the rally may be temporary. Liquidation-driven buying does not necessarily represent durable spot demand, and prices can reverse once leveraged shorts have been cleared. Falling open interest could signal a healthier reset and lower near-term volatility, while renewed leverage would increase both squeeze potential and downside risk. Similar historical episodes, including the July Ethereum move and the much larger August squeeze, show that these events can produce sharp gains but also unstable market conditions. The overall direct price bias is therefore bullish, with elevated volatility and reversal risk.