Bitcoin Short Squeeze Officially Over, Charles Schwab Warns
Bitcoin's recent surge to nearly $80,000 was built on borrowed conviction, and Charles Schwab says the bill has come due. In its August 21 Weekly Trader's Stock Market Outlook, Schwab confirmed that the short squeeze driving Bitcoin's recent surge has run its course, citing a full leverage reset and a Federal Reserve that shows no sign of loosening up.
A record liquidation event occurred on August 19 alone, with $1.37 billion in Bitcoin short positions being liquidated, nearly doubling the prior single-day record. Over August 19 and 20 combined, more than $2 billion in leveraged short bets were wiped out.
Schwab's report framed the move clearly: short squeezes like this are typically transient. The price action was real, the pain for short sellers was real, but the underlying catalyst was mechanical rather than fundamental.
The market structure after the squeeze saw a drop in perpetual futures open interest to its lowest level since May 2026 and funding rates returned to a neutral state following the squeeze. Schwab flagged this dynamic directly, noting that a digestion phase would likely follow such a rapid price surge.