Roughly $9.71 billion in crypto derivatives positions were liquidated over the past 14 days, with a single-day event on August 19-20 wiping out between $2.7 billion and $3 billion in short positions. Bitcoin surged past $71,000 as forced short covering fed on itself, marking the largest liquidation of shorts since November 2021.
Bitcoin surged from intraday lows around $64,100 to peaks exceeding $71,000-$72,000, levels not seen since early June, as a wave of forced short covering tore through the crypto derivatives market. Traders betting on lower prices bore the brunt: shorts accounted for roughly 92% of the liquidations during the peak window, and more than $1 billion in short positions evaporated in just one hour at the most intense stretch.
The largest short squeeze since 2021
The carnage started on August 19-20, when a single-day liquidation event wiped out between $2.7 billion and $3 billion in short positions — the largest concentrated liquidation of shorts since November 2021. Over the full two weeks, approximately $9.71 billion in positions were liquidated across the market, with the overwhelming majority coming from traders who bet prices would fall.
According to CoinGlass data, Bitcoin shorts alone made up about $1.37 billion of the liquidations during the critical 24-hour window, while Ethereum shorts contributed another $1.01 billion. The remaining liquidations spread across altcoin positions, though Bitcoin and Ethereum dominated the wreckage.
Exchanges absorb the fallout
Among exchanges, Binance reported $518 million in short positions wiped out within a single session. Hyperliquid followed closely at $513 million, and Bybit recorded $303 million. The spread of liquidations across all three platforms shows decentralized perpetual platforms are now absorbing exchange-level volumes during stress events, while Hyperliquid's total nearly matching Binance's suggests the competitive landscape for derivatives trading has shifted meaningfully since the last cycle's major liquidation events.
A short squeeze works like financial dominoes: rising prices trigger margin calls on leveraged short positions, and exchanges close those positions by buying the underlying asset, which pushes prices higher and triggers further liquidations. Bitcoin had spent weeks consolidating in the low-to-mid $60,000 range, breeding complacency among shorts who assumed the ceiling would hold. The US Treasury's bond buybacks compressed yields during this period, providing a supportive backdrop for risk assets more broadly.
As the initial cascade unfolded, momentum carried through the rest of the week: cumulative short liquidations reached approximately $7 billion in the seven days following the squeeze, as residual bearish positions continued to get picked off by the sustained rally.
Source: Crypto Briefing
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