Crypto short squeeze wipes out $4.7B leverage

TLDR

Around $4.7 billion of leveraged crypto positions were forcibly closed in a short squeeze as prices rebounded from a sharp selloff.

1. Roughly $4.73 billion of leveraged positions were liquidated in 24 hours, with short positions slightly more affected than longs across BTC, ETH and major altcoins.
2. Despite this flush, total derivatives open interest is still around the high hundreds of billions of dollars and total crypto market cap rose about 2.7%, so leverage remains significant.
3. The main things to watch now are open interest, funding rates and key spot levels such as Bitcoin around $60,000, since another build-up of crowded positions could trigger new squeezes in either direction.

Deep Dive

1. Size And Shape Of The Squeeze

One analysis reported about $4.73 billion in leveraged crypto positions liquidated over the 24 hours ending 7 June, with short liquidations around $2.46 billion and long liquidations about $2.27 billion, meaning bearish traders took slightly more pain as prices rose.

By asset, Ethereum (ETH) saw about $1.43 billion liquidated, Bitcoin (BTC) roughly $872 million, with large altcoin hits in Solana (SOL), XRP and Dogecoin, highlighting that this was not just a BTC story but a broad-market derivatives washout.

Venue data showed Binance handling the largest share of liquidations in a key four-hour window, with a strong skew toward short liquidations on some platforms, a classic short squeeze pattern where rising prices force shorts to buy back into strength.

2. Leverage After The Flush

Even after this event, derivatives exposure remains large. Aggregate open interest across futures and perpetuals sits around $383388 billion, with global open interest slightly higher than 24 hours earlier and perpetuals open interest up about 16% over the same window.

For BTC alone, recent 24-hour liquidations total about $105 million, but the seven-day figure is roughly $3.04 billion and 30-day around $5.42 billion, showing repeated forced deleveraging waves rather than a one-off event.

Over the last day, total crypto market cap rose from about $2.11 trillion to $2.17 trillion (around +2.7%), while average funding rates are mildly negative, suggesting leverage remains meaningful and slightly tilted toward short positioning.

3. What To Watch Next

Three indicators matter most from here:

1. Open interest trends, especially if it climbs back toward prior highs while prices stall, which can set up the next squeeze.
2. Funding rates and basis, since persistently negative funding with rising open interest often signals crowded shorts and squeeze risk, while very positive funding indicates overheated longs.
3. Key spot levels such as BTC near $60,000 and ETH around recent lows, because breaks or reclaiming of these areas tend to coincide with larger liquidation clusters.

A separate, smaller 24-hour liquidation wave of about $315 million that hit mostly longs soon after shows how quickly the market can flip from short squeeze to long flush when leverage remains high.

Conclusion

A roughly $4.7 billion short squeeze has cleared out many bearish positions but left the crypto market still heavily derivatives-driven and sensitive to new shocks. Prices have bounced, yet open interest, funding and key spot levels suggest the system remains primed for further squeezes, making positioning and risk management more important than directional conviction alone.