Bitcoin Short Sellers Lose $504M in Squeeze as 2-Year Yield Hits 4.19%, Oil Jumps 3%

Bitcoin News

Traders positioned against Bitcoin absorbed heavy damage as the asset rebounded from below $60,000, with short sellers losing roughly $504 million over the 24 hours into Monday morning. That marked the largest single-day wipeout for bearish positions since late April. By contrast, traders betting on higher prices forfeited just $151 million, underscoring how lopsided the recovery turned out to be. The bounce caught many participants who had piled into shorts near last week's lows, only to watch Bitcoin surge toward a peak near $63,800 on Sunday before momentum cooled. The reversal punished crowded directional bets across the board.

The broader deleveraging swept about $655 million in total crypto liquidations and forced more than 104,000 traders out of their positions. Bitcoin alone accounted for roughly $315 million of the carnage, while Ether contributed about $201 million. The single largest forced closure was a $12.3 million Bitcoin futures position liquidated on the OKX exchange. Liquidations occur when a venue automatically closes a leveraged trade that has moved too far against the holder, accelerating price swings in both directions. The scale of the unwind highlights how much leverage had accumulated during the descent, leaving the market vulnerable to a sharp snapback once selling pressure eased.

Macro conditions added another layer of pressure, with the two-year U.S. Treasury yield climbing to 4.19% on Monday, its highest reading since February 2025. The move extended a sharp rise that gathered pace after a stronger-than-expected U.S. jobs report. The yield has advanced roughly 80 basis points since geopolitical tensions escalated in late February, including a gain of more than 10 basis points last week alone. Because the two-year maturity tracks the Federal Reserve's policy horizon closely, its ascent signals growing bets that the central bank's next step could be a rate hike rather than the two cuts markets priced earlier this year.

Rising yields typically act as a headwind for risk assets, and a fresh geopolitical shock compounded the strain. Renewed strikes between Iran and Israel sent oil prices up more than 3% and dragged Asian equities sharply lower, with South Korea's KOSPI sliding almost 7%. President Donald Trump urged Israel against further retaliation, but the risk-off mood still rippled into digital assets. Bitcoin, which had touched as high as $63,700 in early Monday trading, slipped back toward $62,900 as the headlines landed. The pullback nonetheless left the asset comfortably above the floor it tested only days earlier, suggesting buyers remained engaged near support.

The volatility caps a turbulent stretch in which Bitcoin shed nearly 14% last week and briefly traded under $60,000. Several catalysts converged to drive that slide, including Strategy's first Bitcoin sale since 2022, an unwind across artificial-intelligence equities, and a record run of withdrawals from spot Bitcoin exchange-traded funds. The combination drained liquidity and amplified downside momentum, leaving sentiment fragile heading into the weekend. That backdrop helps explain why so many traders leaned bearish, and why the subsequent rebound proved so costly for those who mistimed the bottom and held their short exposure too long.

Looking ahead, market participants are bracing for elevated turbulence as several high-impact events approach. Upcoming U.S. inflation figures could reshape interest-rate expectations, while a wave of major initial public offerings, including SpaceX, threatens to pull liquidity and attention across financial markets. With leverage rebuilding and geopolitical risk unresolved, two-way volatility appears likely to persist in the near term. The recent whipsaw between a bearish capitulation under $60,000 and a swift recovery toward $63,800 illustrates how quickly conditions can flip, rewarding patient buyers while repeatedly trapping over-leveraged speculators on both sides of the trade.

Technically, Bitcoin trades near $62,990, up about 1.4% on the day, yet the structure remains a downtrend. The MACD continues to flash a bearish signal, while the RSI sits at 25.65, deep in oversold territory that often precedes relief rallies but also confirms weak momentum. Immediate support rests at $61,748, with deeper floors at $59,098 and $52,679 if selling resumes. Resistance stands at $64,276, then $66,703 and $71,015. A decisive close above $64,276 would strengthen the recovery case toward a bullish reversal, while a daily break below $61,748 would invalidate the rebound and reopen downside risk.