Bitcoin Soars to $92,000, Leading to $182 Million in Short Liquidations

Bitcoin has staged a remarkable turnaround, skyrocketing to $92,000 and triggering a wave of short liquidations on derivatives exchanges.

Key Takeaways

Bitcoin surged to $92,000 after dropping below $84,000, reflecting an 8% increase within 24 hours.
The broader cryptocurrency market experienced a similar rise, with Ethereum outperforming Bitcoin.
Liquidations in the crypto market exceeded $410 million in one day, primarily from short positions.
A "short squeeze" occurred, where a rapid price increase forced the closure of many short contracts, exacerbating the price movement.

Bitcoin

Bitcoin's Rapid Recovery to $92,000

After experiencing a setback on Monday when its price dropped below $84,000, Bitcoin made a swift recovery on Tuesday. The cryptocurrency's price is now above $92,000, reflecting a surge of more than 8% in the past 24 hours.

Bitcoin Price Chart
The trend in the price of the coin over the last five days | Source: BTCUSDT on TradingView

As is often seen, Bitcoin was not alone in this rally; the entire cryptocurrency market has risen alongside it. Several prominent altcoins have even outperformed BTC, with Ethereum (ETH) registering a nearly 10% profit in the last day. This resurgence has introduced a new wave of volatility, triggering a liquidation squeeze in the derivatives market.

Crypto Liquidations Exceed $400 Million in 24 Hours

Recent data from CoinGlass shows that over $410 million in liquidations were recorded in the cryptocurrency market within the past day. "Liquidation" refers to the forced closure of a contract that incurs significant losses, as determined by the trading platform.

Given the recent upward movement in prices, it's no surprise that short positions were primarily affected in the liquidation event.

Bitcoin Liquidations
The breakdown between short and long positions for the latest liquidation squeeze | Source: CoinGlass

As illustrated in the data, $348 million in short positions were liquidated in the last 24 hours, accounting for approximately 85% of the total liquidations. Bitcoin, Ethereum, and Solana were the top contributors, with liquidations of $196 million, $95 million, and $18 million, respectively.

Bitcoin & Other Cryptos
How the liquidations compare between various symbols | Source: CoinGlass

Only $13 million of the Bitcoin liquidations involved long positions, leaving $182 million impacting traders who were betting on a downturn for the cryptocurrency. This situation, commonly referred to as a "squeeze," predominantly affected short positions — hence it is labeled a short squeeze.

During a squeeze, a sudden price movement triggers significant liquidation events, further fueling price fluctuations. Such occurrences are not uncommon in the cryptocurrency market, where assets often exhibit volatility, and many traders utilize high levels of leverage.