Bearish Traders Burned by $1 Billion Short Liquidation Squeeze

Bearish traders took a beating as short liquidations hit $1.06 billion in a day, according to data from BeInCrypto Markets. This marks a significant increase from previous days, with the total crypto market capitalization rising by 3.7%. The number of traders affected was substantial, with 141,191 bearish investors losing their shorts.

Bitcoin (BTC) drove the bulk of short liquidations, accounting for $789.68 million of the losses. This is not surprising given its 8.4% climb to $74,998. The cryptocurrency reached an intraday high of $75,744 on Friday, narrowly missing the True Market Mean of $75,800.

Other major cryptocurrencies like Ethereum (ETH) and XRP also saw significant liquidations, with losses totaling $206.88 million and $41.94 million respectively. XRP led the large caps with a 16.2% daily gain to $1.26, while Ethereum climbed 10.1% to $2,315.

The price rally is attributed in part to the Treasury's decision to double its long-end debt buybacks on August 19, raising each operation to at least $4 billion. This move caught bearish traders off guard and triggered a self-reinforcing squeeze as short positions hit liquidation levels, forcing exchanges to buy BTC to close them.