BTC rebound triggers $504M short liquidations

TLDR

Bitcoins rebound from below 60,000 USD to around 63,000 to 64,000 USD triggered one of the largest short squeezes in weeks.

1. Traders shorting Bitcoin lost about 504 million USD in forced liquidations over 24 hours, with roughly 650 million USD wiped out across all crypto positions.
2. The squeeze followed a steep drop and crowded late shorts, in a market still showing extreme fear and high leverage rather than broad confidence.
3. Volatility is likely to stay elevated, so key things to watch are the 60,000 USD area, derivatives positioning, and upcoming macro data such as US inflation.

Deep Dive

1. What Actually Happened

After falling nearly 14 percent last week and briefly trading below 60,000 USD, Bitcoin (BTC) bounced sharply toward 63,700 to 64,000 USD over the weekend and into Monday.

That move crushed traders betting against BTC. Short sellers lost about 504 million USD in 24 hours, the largest daily hit since late April, as part of roughly 655 million USD in total crypto liquidations affecting more than 100,000 traders. One detailed breakdown notes that about 315 million USD of those losses came from Bitcoin positions and around 201 million USD from Ethereum.

Liquidations cluster because, when price moves quickly, exchanges auto close many leveraged short positions at once, which forces buy backs and can push price even higher in a classic short squeeze.

2. Why Liquidations Were So Large

The squeeze came after weeks of downside where longs had already been heavily liquidated and BTC briefly hit year lows near 59,000 USD. Many traders added shorts near those lows, expecting further declines. When BTC instead ripped back above 63,000 USD, those late shorts were especially vulnerable.

Reports point to a mix of drivers behind the initial selloff and crowded bearish positioning: Strategys first Bitcoin sale since 2022, record outflows from spot BTC ETFs, and risk-off reaction to Middle East tensions and equity volatility. When BTC bounced, CoinGlass data showed shorts losing about 504 million USD while longs lost only around 151 million USD, according to one market recap.

At the same time, broader metrics still look cautious. A separate analysis puts the Crypto Fear and Greed Index around 8 to 15, firmly in extreme fear, and notes that ETF flows remain negative even as price bounced. Another piece calls the move a relief rally, not yet a clear trend reversal.

3. What To Watch Next

From a market structure perspective, three areas matter now:

1. Key price zones. The 60,000 USD region and the low 60,000s coincide with important longer term averages and recent lows. Holding above that band would support the bottoming narrative; losing it cleanly would reopen downside levels discussed by analysts in the mid 50,000s or below.
2. Derivatives leverage. Perpetual futures open interest globally is still large and has even ticked slightly higher over 24 hours, while funding remains mildly negative. That suggests there is still meaningful short hedging and speculative leverage in the system, which can fuel further squeezes in either direction.
3. Macro and flows. Articles consistently highlight upcoming US inflation data, ongoing geopolitical headlines, and spot ETF flows as the main external drivers. Continued ETF outflows or a hawkish macro surprise would lean bearish, while stabilization there would support consolidation or further recovery.

Conclusion

Bitcoins rebound triggered a large short squeeze, with around half a billion dollars in bearish positions forcibly closed as price snapped back above 63,000 USD. That shows how crowded short positioning had become after a sharp drawdown, but broader sentiment, ETF flows, and macro risk remain fragile. The next phase depends on whether BTC can defend the 60,000 USD area while leverage normalizes and external pressures ease, or whether this squeeze is just a pause in a deeper corrective phase.