Bitcoin Leads $8.58M Crypto Liquidation Wave as Shorts Get Squeezed

Crypto News

Cryptocurrency leverage traders lost roughly $8.58 million to forced liquidations over a four-hour window, with short positions absorbing the brunt of the damage. Derivatives data shows shorts accounted for $5.67 million, or 66.08% of the total, against $2.91 million in long liquidations. The lopsided ratio points to a short squeeze — a move where traders betting on lower prices are forced to buy back positions as the market rallies, adding fuel to the advance. Our reading of the flow suggests bearish leverage that built up during the recent pullback was rapidly unwound as prices rebounded, catching downside bets offside across most major venues.

Binance concentrated the largest share of the pain, recording $4.27 million in liquidations — 49.79% of the four-hour total. Short positions made up $2.51 million of that figure, a 58.78% skew that mirrored the broader market's upside pressure. Exchange data show liquidations clustering where open interest was heaviest, a reminder that crowded leverage becomes fragile the moment momentum reverses. For traders running an AI trading bot or managing leverage manually, the episode underscores how quickly margin requirements can trigger cascading closures once price breaches a dense cluster of stop levels.

Hyperliquid produced the most striking imbalance, with $1.45 million liquidated and shorts representing an extraordinary 99.1% of that sum. In practical terms, nearly every position wiped out on the venue was a downside bet — a textbook signature of a concentrated squeeze. OKX followed with $1.09 million liquidated at a 65.22% short skew, while Gate logged $601,300 with shorts at 80.78%. Bybit bucked the trend: its $768,290 in liquidations leaned long at 58.34%, the only major exchange where bulls, not bears, carried the heavier losses. The divergence highlights how positioning can vary sharply across trading platforms during a fast rebound.

Across the full 24-hour heatmap, Bitcoin (BTC) remained the epicenter of leverage unwinding, registering $23.22 million in liquidations — the single largest tally of any asset. Ethereum (ETH) followed at $16.91 million, keeping the two largest cryptocurrencies at the center of market-wide deleveraging, and combined liquidations across other tokens reached $14.73 million. With Bitcoin trading near $64,000 and Ethereum around $1,800 at the latest reading — still well below its all-time high — the data confirms that most forced closures still concentrate in the two assets that anchor derivatives open interest.

Beyond the majors, altcoin liquidations spread across a widening list of names. Solana (SOL) logged $4.10 million in closures yet held a 62% long bias over 24 hours alongside a 2.44% price gain, signaling buyers retained control despite the churn. SNDK saw $3.95 million liquidated, SKL $2.99 million and LAB $2.85 million. SIRE stood out with a 55% long share and a 4.12% advance, while Dogecoin (DOGE) posted a 53% long bias and a 3.18% rise — evidence that momentum favored bulls across several mid-cap and meme names during the bounce.

Not every corner of the market leaned bullish. Positioning data flagged several tokens where bearish bets dominated: FLOKI carried a 57% short share and slipped 2.02%, while Optimism (OP) showed a 52% short bias and fell 3.21%. PEPE registered a 54% short share with a 0.48% decline, and Arbitrum (ARB) sat at 55% short. The split illustrates a market trading in two directions at once — a squeeze lifting the majors and select alts, even as concentrated downside bets kept pressure on a handful of smaller-cap and layer-2 names still fighting the tape.

Our reading of the session ties these threads to one dynamic: a relief rally squeezing crowded short positions while sentiment stays cautious. COINOTAG's aggregate market data puts the Fear & Greed Index at 26 out of 100 — firmly in Fear territory — even as prices climb, a divergence that typically accompanies short-driven bounces rather than fresh conviction buying. Bitcoin dominance sits at 69.7%, underscoring capital's preference for the majors, and total crypto market capitalization stands near $1.85 trillion. Whether on centralized venues or DeFi lending markets like Aave, concentrated leverage remains the market's primary source of short-term volatility.