Bitcoin’s surge to $104K liquidates nearly $400M in short bets

• Bitcoin surged over 3% in 24 hours, topping $104,000 (highest since Jan 31).
• Nearly $400 million in bearish BTC short positions were liquidated in 24 hours (highest since Nov).
• The significant short squeeze suggests potential for further upside as bearish pressure eases.

Bitcoin experienced a powerful upward surge in the last 24 hours, decisively breaking above key psychological levels and catching many bearish traders off guard, leading to substantial liquidations of short positions.

The rally was underpinned by positive macroeconomic news and continued strong institutional interest in the leading cryptocurrency.

The price of Bitcoin (BTC) climbed over 3% within a 24-hour period, trading around $102,500 and at one point surpassing the $104,000 mark – its highest level since January 31.

This bullish momentum was not confined to Bitcoin; the broader cryptocurrency market also rallied significantly.

The total market capitalization of all cryptocurrencies, excluding Bitcoin, surged by an impressive 10% to reach $1.14 trillion, a peak not seen since March 6, according to data from TradingView.

Two key catalysts appear to have fueled this sharp upswing.

Firstly, President Donald Trump announced a comprehensive trade deal had been reached with the United Kingdom, a development that generally boosts risk appetite in global markets.

Secondly, cumulative inflows into US-listed spot Bitcoin exchange-traded funds (ETFs) reportedly hit a new record high, surpassing $40 billion, signaling sustained and growing institutional demand for direct Bitcoin exposure.

Bearish bets decimated in short squeeze

This rapid and strong price appreciation triggered a significant “short squeeze,” where traders who had bet on Bitcoin’s price falling were forced to close their positions at a loss as the market moved against them.

According to data from Coinglass, nearly $400 million worth of bearish BTC short positions were liquidated over the past 24 hours.

This represents the highest single-day total for short liquidations since at least November.

A position is liquidated, or forcibly closed by an exchange, when adverse price movements cause a leveraged trader’s account balance to fall below the required margin level, preventing further losses.

In contrast, a relatively modest $22 million in bullish long positions were wiped out during the same period.

Implications of the imbalance: more upside ahead?

The substantial imbalance between short and long liquidations provides a telling insight into recent market positioning.

It indicates that leverage was heavily skewed towards the bearish side, meaning many traders were anticipating or positioned for a price decline.

The rapid unwinding of these short positions, as traders were forced to buy Bitcoin to cover their losses, likely exacerbated the upward price movement.

Market analysts often view such a significant liquidation of shorts as a potentially bullish signal for the near term.

It suggests that a considerable amount of selling pressure has been removed from the market, potentially clearing the path for further price gains as the prevailing sentiment shifts and buyers gain more control.

The combination of positive external catalysts and the internal market dynamics of a short squeeze could set the stage for continued upward momentum for Bitcoin and the broader crypto market.