Crypto market cap rebounds above $2.5T after $250M short squeeze
The Crypto market cap climbed 1.4% to about $2.52T as over $250M in short positions were liquidated, boosting prices and triggering a broader risk-on move. The Crypto market rally began late in U.S. hours after reports said Iran is considering accepting Bitcoin for oil cargo ships passing through the Strait of Hormuz.
Bitcoin (BTC) rose to around $73,000 (later around $72,000). Ethereum (ETH) surged past $2,200. Most large-cap assets traded higher, reflecting the unwind of bearish positioning.
Derivatives data from CoinGlass showed $250M+ in short liquidations over the past 24 hours, versus about $95M in long liquidations—evidence that forced buybacks helped fuel the bounce.
Spot crypto ETF flows also supported the Crypto market move. SoSoValue data indicated net inflows of $343M into spot BTC ETFs on Thursday and $85M into spot ETH-linked products, following two days of outflows.
External sentiment in Asia was also positive, with major tech indices rising, while gold and silver slipped as some investors rotated away from traditional safe havens.
Key risks remain. Geopolitical ceasefire uncertainty around Iran’s position in the Strait of Hormuz could reintroduce volatility. Separately, stickier U.S. inflation (core PCE up 0.4%) may keep the Federal Reserve hawkish and delay rate cuts, which typically pressures risk assets like crypto.
Bullish
This news is bullish for near-term trading because it combines (1) a clear short-squeeze catalyst ($250M+ short liquidations) with (2) renewed spot ETF inflows (notably $343M into BTC ETFs and $85M into ETH products). When short positioning is forced to unwind, order books often shift quickly, and the resulting momentum can attract additional discretionary bids—similar to prior episodes where liquidation-driven breakouts quickly lifted BTC/ETH toward fresh resistance levels.
In the short term, traders are likely to stay momentum-focused: gaps above key levels can “stick” for hours to days while traders chase trend and options/derivatives positioning resets. In the long term, however, the rally faces two macro/geopolitical headwinds: renewed Strait of Hormuz tension could quickly re-price risk, while sticky U.S. inflation (core PCE strength) can delay rate cuts, typically capping upside for high-beta assets like crypto.
So the base case is a bullish tilt for the next several sessions, but with elevated volatility risk. If ETF inflows persist and liquidation volume stays elevated, the move can extend; if geopolitical headlines worsen or yields rise on hawkish Fed expectations, the market may consolidate or retrace despite the current bounce.