Short squeeze wipes out $567M crypto shorts

TLDR

A major crypto short squeeze just forced roughly $560570 million of bearish positions to liquidate while Bitcoin briefly pushed above the 81 to 82 thousand dollar area.

1. Over the last 24 hours, around 568 million dollars of leveraged crypto positions were liquidated, with about 480 million dollars coming from shorts and only ~88 million from longs.
2. The squeeze was fueled by crowded short positioning, dovish Federal Reserve comments, a weaker dollar, and strong spot Bitcoin and Ethereum ETF inflows.
3. Leverage has been reduced but remains high, so volatility around upcoming macro data and key Bitcoin levels could trigger further squeezes in either direction.

Deep Dive

1. Scale Of The Squeeze

Data from multiple derivatives trackers shows aggregate liquidations around 566568 million dollars in 24 hours, with short positions making up roughly 456480 million dollars of that total, and longs about 88 million dollars, as reported by TradingView and other outlets. One analysis notes about 119,000 traders were liquidated, underscoring how widespread the move was among leveraged accounts.

Bitcoin (BTC) spiked above 82,000 dollars before pulling back, while Ethereum (ETH), Solana (SOL), XRP, and especially Zcash (ZEC) saw outsized moves, with ZEC up around 20 percent and more than 90 percent of its 36 million dollar liquidations coming from shorts.

2. Why Shorts Blew Out

Several forces lined up at once. Fed Governor Waller highlighted signs of disinflation and openness to holding rates steady, which weakened the dollar and supported risk assets, including crypto. At the same time, spot Bitcoin ETFs saw roughly 700 million dollars plus in net inflows in a single session, with Ethereum ETFs adding around 140 million dollars, pointing to renewed institutional demand.

These flows hit a market where many traders were positioned short after prior pullbacks. When BTC broke higher, forced buybacks from liquidated shorts added fuel, lifting total crypto market cap by more than 4 percent overnight to about 2.7 trillion dollars and driving the squeeze.

3. What To Watch Next

Despite the clear reduction in some positions, perpetuals open interest is only modestly lower over 24 hours, and remains above 400 billion dollars, according to derivatives aggregates. That means there is still plenty of leverage in the system.

Subsequent moves have already shown how fast conditions can flip, with later sessions seeing hundreds of millions in long liquidations when macro data surprised to the upside and prices reversed.

Conclusion

This squeeze was a classic example of macro relief, ETF inflows, and crowded shorts combining to produce a violent, but potentially fragile, upside move. Some leverage has been flushed out, yet derivatives exposure remains heavy, which keeps the door open for further sharp swings in both directions as new data tests whether this was a one off event or part of a broader trend shift.