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A massive short squeeze in cryptocurrency markets forced the closure of nearly $2.7 billion in bearish positions over 24 hours, the largest such wave since records began in 2021. Total liquidations reached approximately $3 billion across more than 172,000 traders, with shorts accounting for roughly 92% of the wipeouts. The rally was triggered by the U.S. Treasury’s announcement of expanded longer-term bond buybacks, which sent Bitcoin from around $64,100 to near $70,000. A trader known as pension-usdt.eth lost $23.92 million in just 12 seconds when a 50,000 ETH short position was liquidated on Hyperliquid, erasing roughly half of the $49 million in profits the wallet had accumulated this year. The largest single liquidation was a $48.8 million Bitcoin position, also on Hyperliquid. Bitcoin subsequently pushed above $72,000, with market sentiment shifting into greed territory.
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A massive short squeeze ripped through cryptocurrency markets on Wednesday, forcing the closure of nearly $2.7 billion in bearish positions as Bitcoin surged toward the $70,000 mark. The move represents the largest wave of forced short closures since records began in 2021, according to derivatives data platform CoinGlass.
Total liquidations across the <a href="https://xpertsstudio.com/crypto-market-structure-framework-coming-with-or-without-clarity-act/" title="Crypto market structure framework coming with or without CLARITY Act”>crypto market reached approximately $3 billion over 24 hours, affecting more than 172,000 traders. Short positions accounted for roughly 92% of the wipeouts, dwarfing long liquidations of about $257 million by a ratio exceeding ten to one.
The rally was sparked by the U.S. Treasury’s announcement that it would at least double the amount of longer-term government bond buybacks, a market-supporting measure intended to improve liquidity and reduce stress in longer-dated Treasuries. The news loosened financial conditions and made risk assets like cryptocurrencies more attractive, catching months of accumulated bearish positioning off guard.
Bitcoin climbed more than $5,700 in a single day, rising from a low near $64,100 to touch $69,900—levels not seen since early June. By Thursday morning in Asian trading hours, the largest cryptocurrency was holding just above $69,100, up nearly 8% over 24 hours. Ethereum surged 18% to move above $2,200, while XRP and Hyperliquid’s HYPE token posted double-digit gains as capital rotated beyond Bitcoin into altcoins.
The speed of the squeeze was remarkable. More than $1 billion in Bitcoin shorts were closed in roughly an hour, with Bitcoin accounting for $1.42 billion in total daily liquidations and Ethereum contributing $1.13 billion. Solana followed at approximately $105 million. The largest single position wiped out was a $48.8 million Bitcoin trade on Hyperliquid, the decentralized exchange where much of the carnage unfolded.
One of the year’s most successful short sellers saw nearly half of their accumulated profits erased in just 12 seconds. A wallet identified onchain as “pension-usdt.eth” had spent more than two months—1,445 hours—betting that Ethereum’s price would fall. On Thursday morning, that position collapsed as a 50,000 ETH short worth approximately $106 million was forcibly closed at a loss of $23.92 million.
According to trading records on Hyperliquid, the liquidation ran from 04:51:03 to 04:51:15, broken into five forced sales as the exchange scrambled to close the position. It sold 9,989 ETH at about $2,194, then 20,698 at $2,210, then 15,830 at $2,214, then 1,872 at $2,237. For the final 1,417 ETH, no buyers remained, so Hyperliquid absorbed the remainder into a backstop fund it maintains for exactly these situations.
Over those 12 seconds, Ether’s price climbed roughly $43. Because closing a short means buying the asset back, the trader’s own forced purchases helped push the price higher, making each remaining chunk more expensive to close—a costly feedback loop that accelerated the very move that destroyed the position.
The loss stings more given the wallet’s track record. It had booked around $49 million in profits this year betting against crypto, including nearly $6 million on a 60,000 ETH short and $3.6 million on a 1,400 BTC short, both closed in June. This single liquidation erased roughly half of everything it had earned. Hyperliquid’s leaderboard now shows the account holding just $35.61, down 100% over the past 30 days.
The liquidation burst developed against a backdrop of weeks of sideways trading. Crypto had spent the period following the Oct. 10, 2025 flash crash in a range-bound environment, with Bitcoin largely below $65,000. That consolidation left leveraged positions clustered around similar support and resistance levels, creating the conditions for a violent breakout when the Treasury announcement shifted sentiment.
CoinGlass labels the Aug. 19 event “US Treasury Buybacks + SEC Crypto Reg. Tailwinds” on its historical board, though the data cannot separate the effect of the Treasury news from broader risk appetite, momentum, and derivatives positioning already present after the extended period of range-bound trading.
The scale of the short squeeze also helps explain why cryptocurrency prices moved so quickly. Not every purchase during the rally represented a new investor voluntarily entering the market. Some buying came from exchanges automatically closing short positions as prices crossed liquidation levels. That mechanical demand can accelerate a rally because every price increase puts another group of leveraged bears at risk.
However, liquidation-driven buying is temporary. Once vulnerable short positions have been cleared, thatclosure wave has already eased dramatically—the latest four-hour window recorded just $29.12 million in liquidations, less than 1% of the 24-hour total, while the last hour saw only $3.61 million. Recent liquidations have shifted back toward long positions, suggesting a potential pullback after the sharp rise
The question now is whether Bitcoin can hold above $69,000 through the Asian and European sessions. A squeeze of this size clears out the traders positioned against a rally, which removes the fuel that drove it. Moves built on forced buying rather than fresh demand have a habit of giving some of it back.
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Source: finance.biggo.com