Bitcoin Short Squeeze Drives Over $1B in Liquidations

| cryptobriefing.com
Bitcoin rose more than 5% in 24 hours and briefly moved above $85,000, its highest level since January. The rally triggered a major Bitcoin short squeeze, with more than $1 billion in leveraged crypto positions reportedly liquidated across the market. Estimates varied: CoinGlass recorded about $750 million in 24-hour liquidations, including $648 million in shorts, while other figures put the total near $919 million. Short sellers accounted for roughly $850 million in broader estimates, while Bitcoin short liquidations ranged from $277 million to $384 million. More than $262 million in shorts were liquidated within an hour of Bitcoin breaking above $84,000. About $200 million in long positions were also liquidated as volatility intensified. XRP, Solana and Ethereum-related positions were affected as altcoins rallied. Crypto derivatives open interest rose 7% to 8% to about $156 billion, while trading volume increased by 39% to 58%. The Bitcoin short squeeze has strengthened short-term bullish momentum, but the rapid rise in leverage may increase the risk of profit-taking and further volatility. Traders should monitor funding rates, open interest and whether Bitcoin can hold the $84,000-$85,000 area.
Bullish
The immediate price impact is bullish because Bitcoin reclaimed the $85,000 level after a gain of more than 5%, while forced short closures added buying pressure. The move above $84,000 also triggered more than $262 million in short liquidations within an hour, indicating strong momentum and a potential continuation signal if spot buyers remain active. However, the rally was accompanied by a sharp increase in derivatives open interest, trading volume and leverage. Historically, such short squeezes can extend gains in the short term but may be followed by profit-taking, long liquidations and abrupt reversals when momentum weakens. Holding the $84,000-$85,000 area would support the bullish view; failure to defend it could expose Bitcoin to a pullback. The longer-term impact therefore depends on whether the liquidation-driven rally develops into sustained spot demand rather than remaining a leveraged derivatives event.