Crypto Short Squeeze Wipes Out $113 Million in 24 Hours

Crypto traders who bet against the market faced heavy losses this weekend. Between October 4 and October 5, 2026, $113 million in short positions were liquidated, representing the bulk of $138 million in total liquidations. Long positions, which bet on rising prices, accounted for only $25.16 million in liquidations.

The majority of the liquidations involved Bitcoin and Ethereum. Bitcoin shorts accounted for $57.07 million, while Ethereum shorts totaled $24.04 million. The largest single liquidation was a $5.63 million ETHUSDT short on Binance. In total, 42,225 traders were affected across the exchanges tracked by Coinglass.

This event mirrors a similar pattern observed in July 2026, when $113 million in short liquidations occurred amid a 4.5% rise in Ethereum's price to $1,980. The buying pressure from short liquidations can drive prices higher, creating a feedback loop that triggers more liquidations.

Analysts note that the lopsided liquidations suggest many traders were positioned for a price decline. The focus now shifts to whether funding rates and open interest will rebuild on the short side, potentially setting the stage for another squeeze, or if positioning will become more balanced after this weekend's reset.