Bitcoin Rebound Fuelled By Record Short Squeeze

A massive wave of short liquidations on August 19 triggered Bitcoin's rapid price rebound, according to blockchain analytics firm Glassnode.

The event recorded the single largest volume of single-day short liquidations in Glassnode's data feed since tracking began in 2019. Short positions accounted for roughly 85% of all forced position closures across major centralized exchanges during the squeeze window.

The liquidation cascade began when Bitcoin rapidly surged past key resistance levels, forcing bearish traders to cover their leveraged positions. As Bitcoin broke upward, pending stop-loss orders and forced exchange closures acted as mechanical buy pressure, accelerating the rally toward the $80,000 threshold.

A total of $1.74 billion in bearish bets were forcibly unwound on August 19, with short liquidations outstripping longs by a staggering 4-to-1 margin in some cases. The relentless pressure on leveraged sellers persisted through August 22, wiping out an additional $1.22 billion in short positions.

Spot ETFs provided the secondary tailwind necessary to sustain higher price levels. U.S. spot Bitcoin exchange-traded funds recorded more than $2.2 billion in net inflows during the week following the squeeze, marking the strongest weekly intake of the year.