The crypto market has just been reminded how explosive bearish bets can become. In just 48 hours, a massive wave of short liquidations hit derivatives, while bitcoin moved closer to a major psychological threshold. Behind this acceleration lies a determining macroeconomic factor: the surprise influx of liquidity in the United States. Between short squeeze, American budgetary intervention and repositioning of on-chain investors, this scenario reveals the forces which could now dictate the trajectory of bitcoin.
In brief
- The crypto derivatives market just recorded a historic purge of more than $3.1 billion in short positions in just 48 hours, pushing Bitcoin closer to the $72,000 mark.
- This powerful upward movement was directly triggered by a decision by the US Treasury to double its debt buyback program, leading to a sudden injection of liquidity into the financial markets.
- By capturing $1.65 billion in selling liquidations alone, Bitcoin orchestrated a massive short squeeze that took a significant portion of speculators by surprise.
- Taking advantage of this sudden rise, short-term investors, however, unloaded a record volume of 43,300 BTC in a profit position onto exchange platforms, establishing a significant supply cushion for the days to come.
Largest short liquidation ever recorded in the crypto market
The derivatives market has just experienced two days of forced capitulation of unprecedented intensity for short sellers. According to aggregated data According to analytics platform CoinGlass, liquidations of short positions across the entire crypto market surpassed the $3.1 billion mark between August 19 and 20. Thursday is now established as “largest daily liquidation of short positions on record” in the history of these assets.
In this instability, the BTC/USD pair played its role as the main driver by single-handedly capturing more than half of the losses suffered by bearish investors, representing a total amount of $1.65 billion in short position liquidations. Under constant pressure from forced redemptions, the price of bitcoin climbed to reach a local peak at $71,992, marking its highest level recorded since the beginning of June.
To take the full measure of this movement without distorting the reality of the figures, it is appropriate to observe this sequence in its overall context. If we include all positions, both buyers and sellers, the data provided by CoinMarketCap put Thursday’s liquidation total at $3.25 billion, making the day the seventh largest liquidation event in history in absolute dollar terms.
This volume certainly remains below the shock suffered by buyers during the wave of liquidations of $20 billion, which occurred in the wake of bitcoin’s ATH at $126,200 in October 2025. This recent sequence nevertheless stands out for its almost exclusively bullish dynamic, which trapped thousands of traders convinced that the resistance zone would hold firm.
Several key numerical metrics allow us to summarize the unprecedented scale of this situation:
- $3.1 billion: the total amount of short position liquidations recorded in 48 hours;
- $1.65 billion: the share of short liquidations directly attributable to bitcoin;
- $71,992: the local high reached by BTC, the highest since June.
- $3.25 billion: the cumulative total of all liquidations on Thursday.
A bullish impulse fueled by the liquidity injection from the US Treasury
At the origin of this devastating buying impulse for short sellers is a macroeconomic decision coming directly from Washington. The market immediately reacted to a liquidity intervention from the US Treasury, the latter having decided to double the amount of its debt repurchase operations. This sudden injection of cash into the bond system instantly had an impact on risky assets.
Bitcoin’s rapid surge on Wednesday, materializing its highest level in 11 weeks, triggered a relentless squeeze mechanism: crossing sellers’ invalidation levels led to emergency buybacks, mechanically propelling the upward dynamic.
The ripple effect caused by the easing of financial conditions caught a significant part of the institutional market positioned downward by surprise. Additionally, the successive breakout of key technical levels transformed stop-loss orders from sellers into buy orders at the market, accelerating the rise of the premier crypto. This phenomenon of upward aspiration once again demonstrates the close correlation that persists between the liquidity of central banks or finance ministries and the appetite for risk on crypto trading platforms.
Massive profit-taking among short-term holders
Alongside this turbulence in the futures market, on-chain data reveals a pragmatic reaction among investors. Taking advantage of this return of liquidity and this rebound that they had not seen since the summer, short-term holders, that is to say portfolios holding their UTXOs for less than 155 days, massively unloaded their positions.
According to the CryptoQuant platform, the latter transferred a record volume of 44,300 BTC in a profit situation towards the exchange platforms, thus marking their largest profit taking since the start of the year. This positive capitulation is confirmed by the SOPR (Spent Output Profit Ratio) indicator applied to short-term holders. Today, this ratio climbed to 1.01, reaching its highest level since April and attesting that the majority of coins being moved were finally trading above their average acquisition price.
This behavior reflects a marked desire among recent buyers to secure capital after several months of stagnation or non-existent latent capital gains. Returning above the average purchase price for this investor profile often acts as a major test of psychological strength. Thus, the simultaneous influx of more than 44,000 coins onto centralized order books now imposes a significant supply cushion that spot buyers will have to absorb in full if the trend is to maintain its momentum.
The interaction between this massive spin-off of short positions and the simultaneous arrival of this large volume of BTC on centralized platforms paints a complex landscape for the weeks to come. On the one hand, the forced disappearance of a colossal volume of short positions clears the order book and reduces the risk of immediate downward pressure due to leverage. On the other hand, the market’s ability to absorb the flow of tokens put back into circulation by investors relieved to exit at par or with a slight gain will determine whether the $72,000 milestone was just an ephemeral peak fueled by liquidations or the solid foundation for a lasting resumption of the uptrend.
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