Bitcoin Price Rally Fueled by Record Short Squeeze and Spot ETF Inflows
A massive short squeeze on August 19 triggered a bitcoin price rally toward $80,000, according to blockchain analytics firm Glassnode. The event was the largest single-day short liquidation since 2019, with over $1.74 billion in bearish bets forcibly unwound.
The short liquidations initiated an upward momentum that persisted through August 22, with a total of $2.96 billion in short positions being wiped out during this period. Glassnode noted that the event was not just a one-time occurrence but rather part of a larger trend.
The spot ETFs played a crucial role in sustaining the rally, recording over $2.2 billion in net inflows during the week following the squeeze, which is the strongest weekly intake of the year. The analyst also mentioned that 1.05 million BTC held between $83,000 and $86,000 could present a major supply test for bitcoin.