Record Short Squeeze Triggers Bull Market Reset for Bitcoin
Bitcoin's price surged 23% over the past week, its strongest one-week return since November 2024. The surge was largely driven by a record short squeeze and shifting macro backdrop.
A record $1.37 billion in Bitcoin shorts were liquidated on August 19, nearly double the previous daily high of $757 million from July 2021. This pushed notional perpetual futures open interest down to 284,000 BTC, its lowest since May, while funding rates returned to neutral.
The strong price action also saw spot and perpetual futures volumes jump 188%, while CME volumes rose 152%. Bitcoin ETF products recorded net inflows of 31,740 BTC, their strongest week since the October 2025 highs.
K33 Research's Head of Research Vetle Lunde noted that Bitcoin reclaimed its 50-day, 100-day, 200-day, and 200-week moving averages in just four days. This is faster than any prior cycle, with only three previous occasions where all four moving averages were reclaimed within 45 days: October 2015, April 2020, and October 2023, each around the beginning of a cyclical bull market.
The six-month 25-delta options skew also turned negative for the first time since September 2025, meaning calls became more expensive than puts after 11 consecutive months of traders paying a premium for downside protection. This shift in macro backdrop towards scarce assets was sparked by Treasury Secretary Scott Bessent's push to increase long-term bond buybacks.