Bitcoin Faces Crucial Supply Wall After Record-Breaking Short Squeeze
A record-breaking short squeeze in Bitcoin has triggered a 26% rally since its mid-August low, but it now faces a significant supply wall at $81,000 to $86,000.
The largest single-day short liquidations on August 19, 2026, accounted for 85% of total liquidations, with 86% of those liquidations absorbed during the rebound. This squeeze effectively cleared leveraged positions across the market, causing open interest in futures contracts to contract by 11%.
The rally has been supported by genuine buying pressure from U.S. spot ETFs, which recorded their strongest weekly inflows of the year with a net inflow of $2.23 billion. This influx of capital has provided clear fundamental support for Bitcoin, but whether it can extend to January's highs remains uncertain.