Bitcoin's $64,500 Surge Attributed to Short Squeeze on Derivatives Markets

Bitcoin's surge to $64,500 on Monday was largely due to a short squeeze on derivatives markets, according to CryptoQuant. The analytics platform attributed the price increase to illiquid markets and funding-rate imbalances among exchanges.

Funding rates between exchanges began to diverge before the rebound, with shorts dominant on major platforms such as Binance, Bybit, OKX, and Deribit, while HTX briefly spiked to 0.05%. This crowded short positioning fueled a short squeeze that drove prices higher, CryptoQuant said.

Total Bitcoin short liquidations reached 637 BTC for Monday, the largest single-day tally since July 21. The event was described as a 'low-volume liquidity trap', but CryptoQuant suggested that more short squeezes could occur with funding rates already declining again as traders increase short exposure.