Bitcoin Rally: Short-Sellers Face Massive Losses
Bitcoin’s recent powerful rally to unprecedented price levels delivered a crushing blow to short-selling traders, resulting in over $1 billion worth of short positions being forcibly closed within a single 24-hour period. Data from CoinGlass vividly illustrates this significant market event, showing that approximately 232,149 traders across the cryptocurrency landscape were impacted by these liquidations.
This immense financial fallout underscores the inherent volatility and rapid directional shifts that characterize digital asset markets, especially during periods of record-breaking price action.
Dominating BTC and ETH Shorts
The brunt of these widespread liquidations was heavily concentrated on Bitcoin short positions, which accounted for approximately $570 million in wiped-out bets. Ethereum (ETH) shorts also experienced substantial losses, with $206.93 million being liquidated during the same timeframe.
Specifically, CoinGlass data indicates that Bitcoin-related liquidations alone amounted to $590.04 million over the 24 hours, while long positions only saw a comparatively minor $20.21 million in liquidations. This stark imbalance highlights the decisive upward momentum of the market and the severe consequences for those positioned against it.
All-Time Highs: BTC and ETH Break Records
The cascade of liquidations coincided with Bitcoin establishing new record highs for the second consecutive day, first hitting $112,000 on Wednesday and then surging further to $116,500 on Thursday. In parallel, Ether experienced a significant climb, reaching $2,990 on Thursday, reflecting a broad positive sentiment across the entire crypto market. This synchronized ascent propelled the overall crypto market capitalization to spike by 4.4% over the past 24 hours, reaching a total of $3.63 trillion, according to CoinMarketCap data, signaling a robust and widespread digital asset rally.
Market Sentiment: “Bears in Disbelief” Echoes
The swift and dramatic market turnaround prompted immediate and widespread commentary from leading crypto analysts and traders. Miles Deutscher, a prominent crypto analyst, succinctly captured the prevailing sentiment on X, declaring, “Bears in disbelief.” Similarly, crypto trader Daan Crypto Trades described the event as a “MASSIVE Short squeeze on BTC & ETH.”
Echoing this reaction, Velo noted the extensive liquidation event by remarking, “Lots of emails are being sent,” a direct reference to the numerous margin calls and forced liquidation notifications received by affected traders.
Donald Trump’s Tariffs: Past Market Shocks
While the recent liquidation event was substantial, it is important to note that it was not the largest in cryptocurrency history. A more significant event occurred on February 3, when over $2.24 billion was liquidated amidst escalating concerns of a global trade war, triggered by US President Donald Trump’s executive order to impose import tariffs.
Earlier in the week leading up to the latest price surge, some market analysts had expressed skepticism about Bitcoin’s ability to reach new highs, with Bitfinex analysts observing a “lack of follow-through strength” as BTC struggled against its previous all-time high.
Divided Before the Upswing
Prior to the recent rally, trader sentiment regarding Bitcoin’s immediate future was notably split. While some analysts, like those at Bitfinex, observed a hesitation among bullish investors to push prices significantly higher without fresh catalysts, others maintained a more optimistic stance.
Michaël van de Poppe, founder of MN Trading Capital, had confidently predicted on June 30 that “The inevitable breakout to an ATH on Bitcoin might even happen during the upcoming week,” a forecast that ultimately proved accurate. This divergence in expert opinion underscores the inherent unpredictability that often characterizes the crypto market.
Future Risks for Leveraged Positions
Despite the current upward trajectory, the cryptocurrency market remains highly susceptible to significant volatility. Approximately $2.11 billion in long positions are currently at risk of liquidation should Bitcoin’s price retrace to Wednesday’s level of $112,000.
This indicates that while the recent price pump severely impacted short-sellers, a sudden downward movement could similarly devastate long positions. This ongoing risk highlights the high-stakes nature of leveraged trading in the cryptocurrency market, where both rapid gains and substantial losses remain a constant possibility.
