Bitcoin Price Rally Flips from Short Squeeze to Long Squeeze

Bitcoin's price briefly fell below $78,000 after a sharp rally to $80,000 driven by Treasury developments and ETF inflows. The decline triggered over $300 million in crypto liquidations as traders took profits. Long positions accounted for about $270 million of the wipeout.

The largest single liquidation was an $11.91 million Bitcoin position on Binance. Long traders have quickly rebuilt leverage after last week's surge forced bearish traders out of the market, according to Wintermute.

CryptoQuant data shows that spot and futures demand for Bitcoin have been rising together, with total demand increasing by about 170,000 BTC over the past 30 days. However, this synchronized growth leaves the market vulnerable when futures exposure expands faster than spot buying.