BTC rally wipes $2.74B in short positions

TLDR

Bitcoin (BTC) spiked toward 70,000 USD, triggering one of the largest short squeezes in crypto history and wiping out billions of dollars in bearish bets.

1. Data from derivatives trackers shows around 2.72.74 billion USD of short positions were liquidated in 24 hours, with BTC shorts alone contributing about 1.4 billion USD.
2. The squeeze followed a macro surprise, as the U.S. Treasury signaled it would double long-term bond buybacks, cutting yields and boosting demand for risk assets like Bitcoin.
3. The wipeout sharply reduced leverage but does not yet confirm a new bull trend, and the next phase depends on spot demand, ETF flows, and whether BTC can hold the high 60,000s.

Deep Dive

1. Scale Of The Short Wipeout

Multiple reports cite CoinGlass data showing that in a single 24 hour window, short liquidations reached about 2.72.74 billion USD across crypto, the largest bearish wipeout since at least 2021, with more than 170,000 traders affected. One analysis notes that shorts made up roughly 92 percent of total liquidations, with long liquidations around 250 million USD, a short to long ratio above 10 to 1.

Bitcoin was the main driver. BTC alone saw about 1.42 billion USD in liquidations as it rebounded from the mid 60,000s to briefly trade above 69,00070,000 USD, marking its highest levels since early June. Similar spikes in Ethereum, Solana and other majors contributed to the market wide deleveraging.

2. Macro Shock Behind The Rally

The squeeze did not happen in isolation. Reports tie the move to the U.S. Treasury announcing it will at least double the size of long dated bond buybacks from roughly 2 billion to at least 4 billion USD per operation, starting in September, which pushed long term yields lower. Lower yields tend to make risk assets more attractive, and Bitcoin often trades as a high beta macro hedge in these environments.

Some coverage also highlights political signals, including talk of potential government Bitcoin purchases, as reinforcing the narrative of BTC as a debasement or debt hedge. Together, these factors provided the initial push that put shorts under pressure before the liquidation spiral took over.

3. Leverage Reset, But Trend Unproven

Analytics firms emphasize that this was a positioning event as much as a fundamental one. On chain data from CryptoQuant shows apparent spot demand moving from deeply negative toward flat, which historically has preceded stronger 60 day returns, but is not yet decisively positive. Glassnode metrics cited in coverage note BTC trading above short term holder cost basis but below longer term valuation bands, and realized profit and loss ratios still below levels that mark a clear regime shift.

Large liquidation waves typically reduce open interest and reset leverage, which can make the next leg of price action cleaner but also leave markets vulnerable if new long leverage rebuilds too quickly. Key near term signals are whether BTC can hold support in the mid to high 60,000s, whether spot ETF and exchange inflows stay positive, and how funding rates evolve after the squeeze.

Conclusion

Bitcoins latest surge was driven by a powerful combination of macro easing signals and an overcrowded short side that was forced to unwind in a hurry, erasing roughly 2.7 billion USD in bearish positions. The event cleans up leverage and improves sentiment, but on chain and derivatives data suggest it is still a local repricing rather than a confirmed new cycle leg, with sustainability hinging on spot demand, ETF flows, and how quickly leverage rebuilds.