Crypto Short Squeeze Slams Bears as Bitcoin Reclaims $69K; $400M in Shorts Liquidated

Bears ran straight into leverage math today. As Bitcoin snapped back toward $69,000, systematic short covering ignited a fast, broad rally across majors and altcoins—less a change in fundamentals, more a classic positioning reset.

Bitcoin fell below $63,000 on Tuesday, then ripped to a recent $69,869—up more than 7% on the day—though it remains down over 21% across the last 30 days. Ethereum led large-cap alt strength, rising 12% to $2,075, while Solana jumped almost 14% to just under $89. The broader crypto market added about 6.6% in 24 hours, per CoinGecko, with Polkadot, Filecoin, Uniswap, Aptos, Avalanche, and Chainlink each notching double-digit gains.

The fuel was forced buying. More than $400 million in short positions were liquidated in the past day, according to CoinGlass, the bulk of roughly $463 million in total liquidations. By asset, Bitcoin accounted for about $200 million, Ethereum $153 million, and Solana roughly $22 million.

Here’s the key dynamic worth focusing on: reflexive liquidation spirals. After a month-long drawdown, traders often crowd into shorts with elevated conviction. When price pushes through thin liquidity pockets, exchanges’ risk engines trigger margin calls that auto-buy the market to close positions. That buying lifts price into more stops, reinforcing the move. It looks like real demand, but it’s frequently mechanical—shorts paying up to exit, not fresh spot accumulation. The business incentive compounds it: exchanges earn on volume and funding churn, while perps dominate liquidity, so markets can lurch faster than underlying spot flows justify. Psychologically, traders who “sold the bounce” get whipsawed, flip bias in a hurry, and push volatility further. Ethically, this is the byproduct of easy access to leverage—useful for hedging, often misused as a directional bet.

If you’re gauging durability, watch: - Funding and term basis: do they flip positive and stretch, or normalize quickly? - Open interest versus price: is OI rebuilding on the move, or did today primarily burn shorts? - Spot versus perp volume: is spot leading, or are futures doing the heavy lifting? - Order book depth around prior resistance: does liquidity refill near $70K or get pulled?

Risk appetite also resurfaced in crypto-adjacent equities. USDC issuer Circle spiked 29% to $79 per share after reporting earnings, blockchain lender Figure climbed 15% to $34, and Ethereum treasury leader BitMine Immersion Technologies rose almost 14% to $22. Coinbase advanced 13% to $183, Bitcoin treasury giant Strategy gained nearly 9% to above $135, and Bitcoin miner MARA Holdings added 7% to $8.66. When perps unwind and beta turns risk-on, these proxies often overshoot on the upside as options flow and systematic buyers chase momentum.

One more tell on sentiment: users on Myriad, a prediction markets platform run by Dastan, now assign a 43% chance that Bitcoin’s next major level is $84,000 rather than $55,000. Those odds climbed about 14% over the last day, suggesting confidence is improving even if positioning still tilts cautious.

This looks like a textbook pain trade: fast, technical, and fueled by leverage. Until spot demand and higher-timeframe participation confirm, treat strength with respect but verify it with funding, OI, and spot-led follow-through. Shorts got cleaned up; whether trend resumes requires fresh buyers, not just fewer bears.