Bitcoin recorded its largest short liquidation event since September 2024. More than $736 million in short positions were wiped out across major exchanges in a short period.
The data was shared by on-chain analyst Darkfost on the CryptoQuant platform. The Short Liquidations USD metric tracks the total value of short positions that exchanges forcefully close. This happens when traders bet on lower prices and the market moves against them.
The recent event ranks just below the $773 million in short liquidations recorded on September 20, 2024. Before this squeeze, funding rates on exchanges such as Binance turned deeply negative. That showed many traders were heavily betting on further price drops.
When too many traders hold short positions, the market becomes vulnerable to a short squeeze. In a squeeze, rising prices force exchanges to close short trades. This buying pressure pushes the price even higher in a rapid move.
Darkfost noted that the derivatives market remains full of speculative trades. At the same time, the spot market shows weak demand and thin liquidity. This imbalance can make price swings sharper and more unstable.
However, analysts warn that a short squeeze alone does not guarantee a long-term rally. If strong spot demand does not return, the recent price jump may fade. That leaves Bitcoin in an uncertain phase.
At the time of writing, Bitcoin trades near $69,878. The price is up about 1.5% in the past day and slightly higher for the week. Still, it remains roughly 45% below its all-time high of $126,080.
