Ether’s 8% Surge Traps Short Sellers in $668 Million Crypto Liquidation Wave

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Ether surged as much as 8.3% on Friday, triggering a wave of short liquidations across the crypto market. More than $300 million in Ether bearish bets and roughly $212 million in <a href="https://xpertsstudio.com/revolut-leak-ties-bitcoin-wallets-to-home-addresses/” title=”Revolut leak ties Bitcoin wallets to home addresses”>Bitcoin shorts were wiped out over 24 hours, with total liquidations across all digital assets reaching approximately $668 million. The move was driven primarily by a short squeeze rather than new buying demand, according to analysts at LO:TECH and Bitget Wallet. Ether funding rates flipped negative in perpetual futures, forcing bearish traders to pay to maintain their positions. The episode echoed late August’s record short liquidation event, when Bitcoin’s 23% rally over five days wiped out roughly $2.7 billion in bearish bets. Both tokens pulled back from their session highs, and Bitcoin remains well below its 2026 peak of $94,820.

Key Elements

A wave of forced exits from bearish wagers on Ether triggered a sharp but short-lived rally across digital assets on Friday, as traders who had bet against the second-largest cryptocurrency were squeezed out of their positions.

Ether jumped as much as 8.3% during the session, its largest intraday gain since a similar spike three weeks earlier. Bitcoin rose less than 4%. Both tokens retreated from their intraday highs as the rally lost steam, underscoring the mechanical nature of the move rather than any fundamental shift in demand.

More than $300 million in Ether short positions were liquidated over the 24-hour period, according to data compiled by Coinglass. Bearish bets on Bitcoin saw roughly $212 million wiped out in the same window. The imbalance marked an unusual inversion of the typical pattern, where Bitcoin generally leads in leverage washouts. In the most recent hour of trading, Ether liquidation activity reversed course, with about $1.6 million in long positions closed out, Coinglass data showed.

Across the entire crypto market, approximately $668 million in positions from both directions were forcibly closed over the past day — an elevated reading not seen since the record short liquidation event in Bitcoin the prior month.

“The move is partially a short squeeze,” said Adam McCarthy, head of research at trading firm LO:TECH. “Traders were paying to be short into an 8% rally. This exacerbated the move.”

On Binance, roughly $76 million in Ether positions were liquidated in the 24-hour span, with the bulk of those representing closed short positions, McCarthy said. In perpetual futures markets — the primary vehicle for leveraged crypto bets — funding rates for Ether flipped negative, meaning bearish traders were paying a premium to maintain their exposure while counterparties on the long side collected those payments.

The rapidity of Friday’s price action pointed to speculative mechanics as the primary driver rather than any meaningful influx of new buyers. Traders have largely remained on the sidelines since late August, when a surge in Bitcoin triggered a wave of forced deleveraging and left the market without clear directional catalysts.

“The recent range-bound trading looks like consolidation with fading short-term momentum rather than a confirmed structural breakdown,” said Lacie Zhang, a research analyst at Bitget Wallet.

The episode echoed the volatility seen at the end of August, when Bitcoin’s roughly 23% surge over five days unleashed what was described as the largest wave of short liquidations on record going back to 2021. That rally was set off by the Treasury Department’s announcement that it would at least double the size of its bond buyback operations for longer-dated securities, which pushed yields lower and drew capital into risk assets. Roughly $2.7 billion in crypto short positions were liquidated during that stretch.

Note: Figures are based on Coinglass data cited in the reporting period and reflect approximate values at the time of publication.

Even after the recent gains, Bitcoin has not returned to its 2026 peak of $94,820, set in mid-January, nor to its record high of $126,198 from October 2025. The failure to reclaim those levels despite periodic short squeezes suggests that underlying buying pressure remains tepid, with rallies driven more by the mechanics of forced position closures than by conviction from new market entrants.

For investors, the pattern reinforces a market environment where sharp moves can materialize quickly — and reverse just as fast. The prevalence of leveraged positions in perpetual futures means that any sustained directional move is likely to trigger cascading liquidations, amplifying volatility in both directions. Traders who entered short positions expecting continued range-bound trading were caught off guard by the speed of Friday’s advance, a reminder that positioning itself can become the catalyst in crypto markets.

The broader context of Friday’s session included a deluge of US economic reports and retreating oil prices, which whipsawed financial markets and may have contributed to the initial price impulse. But the magnitude of the move relative to the modest shift in Bitcoin suggested that Ether-specific positioning dynamics played the dominant role.

As the dust settled, Ether’s funding rates remained a key indicator to watch. Negative funding in perpetual futures means shorts are still paying longs — a condition that, if it persists, could continue to pressure bearish positions and set the stage for further squeezes. Conversely, a normalization in funding rates would suggest the market has absorbed the forced deleveraging and may return to the consolidation pattern that has characterized recent weeks.

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Source: finance.biggo.com