Crypto market short squeeze erupts! $400 million liquidated across the entire network, Bitcoin and mainstream coins collectively surge

Recently, the cryptocurrency market has experienced a typical short squeeze (short covering) scenario. In the past 24 hours, short liquidations have rapidly increased, totaling nearly $400 million, marking a three-month high since October. A large number of short traders were forced to close positions during the rapid price surge, directly driving Bitcoin and several mainstream cryptocurrencies to rise simultaneously, resulting in a clear market sentiment reversal.

Data shows that short liquidations account for nearly 78% of total liquidations, with over 100,000 traders being forced out. The largest single liquidation occurred on a major CEX, where a Bitcoin contract position worth over $90 million was instantly liquidated, highlighting the vulnerability of high-leverage shorts during a rebound. Over a 12-hour period, liquidation amounts remained unusually active, further confirming that the rally mainly occurred during a concentrated burst within a short timeframe.

The key driving force behind this rally comes from institutional funds. The US spot Bitcoin ETF quickly resumed net inflows after the New Year, with daily inflows exceeding $400 million, sharply contrasting with previous outflows. Currently, the total net inflow of Bitcoin ETFs has surpassed $57 billion, and the ETF’s total assets continue to increase as a proportion of Bitcoin’s market cap. Institutional holdings are predominantly long positions, while retail traders generally held short positions before the rally. The mismatch in positioning between the two groups has become a critical factor triggering the short squeeze.

In terms of price performance, Bitcoin rebounded to around $93,000, successfully breaking out of the previous consolidation range. Mainstream coins such as XRP, Ethereum, and Solana also strengthened in tandem, with XRP’s short-term and weekly gains particularly notable, boosting market risk appetite. On the exchange level, the short liquidation ratio on the aforementioned CEX and Hyperliquid is extremely high, and even on more mature trading platforms, bearish positions have suffered heavy losses.

Overall, this round of Bitcoin short liquidations has significantly amplified upward momentum through a chain reaction of “covering—rising—re-liquidation.” As the long-short ratio gradually returns to balance, market focus has shifted to whether key resistance levels can be effectively held. If prices continue to stay high, a new round of short covering could once again propel the rally, providing further upward momentum for Bitcoin’s short-term trend.