Bitcoin and Ether Surge Triggers $700M Short Squeeze Across Crypto Markets
A powerful breakout in bitcoin and ether wiped out nearly $700 million in bearish bets as traders rushed to cover positions during a sudden rally.
Bitcoin’s powerful breakout above $95,000 has reignited risk appetite across the crypto market, sending shockwaves through derivatives traders who were positioned for lower prices.
After spending nearly two months capped below resistance, bitcoin finally pushed through the $95,000 level and extended its rally during the U.S. trading session, reaching highs near $97,800. Over the past 24 hours, the world’s largest cryptocurrency gained roughly 3.5%.
Ethereum’s ether outperformed even bitcoin. The second-largest cryptocurrency jumped about 5%, climbing to around $3,380 — its highest level in more than a month — and breaking above the critical $3,300 barrier for the first time in 2026.
The simultaneous surge in both major tokens triggered a wave of forced liquidations across crypto derivatives markets. According to CoinGlass data, nearly $700 million in leveraged short positions — trades betting on falling prices — were wiped out as the market moved sharply higher.
Roughly $380 million of those liquidations came from bitcoin shorts, while more than $250 million were tied to ether positions. When prices rise rapidly, traders holding short positions can be forced out as their collateral becomes insufficient to cover losses, prompting exchanges to automatically close those trades — a process that often accelerates upward price moves.
“The break above $95,000 unleashed a significant pocket of short covering,” said Gabe Selby, head of research at CF Benchmarks. “That created a wave of forced buying as traders scrambled to close losing positions.”
Despite the strength of the rally, some analysts believe the move may be more technical than fundamental. Selby noted that the advance appears “largely mechanical,” driven by market makers pushing prices higher to resolve lingering imbalances from the sharp sell-off seen in October and November.
Still, the breakout has been widely interpreted as a green light for renewed risk-taking across digital assets. Joel Kruger, market strategist at LMAX Group, said bitcoin’s move above $95,000 has restored bullish momentum and opened the door to a potential run toward $100,000 and beyond.
“The broader crypto market is showing strong participation, with major tokens following bitcoin’s lead as risk appetite returns,” Kruger said in a Wednesday note.
Bitcoin’s previous all-time high stands at $126,000, set in early October of last year. Kruger added that supportive conditions in traditional markets — including firm equities and stabilizing bond yields — are helping provide a favorable backdrop for crypto.
Trading volumes also surged alongside the breakout, suggesting that fresh demand, rather than speculative excess, is driving the move. Funding rates on perpetual futures remain relatively low, according to CoinGlass, indicating traders are not excessively crowded on the long side.
Even so, analysts are watching key technical levels for confirmation.
“A weekly close above $95,000 for bitcoin, or a move in ether above $3,500, would be a strong signal that a new bullish phase is underway,” Kruger said.
For now, the rally has delivered a much-needed boost of optimism to a market that has spent months struggling to regain momentum.
Comments
2This move caught a lot of traders off guard. You could feel the squeeze happening in real time.
If BTC holds above 95k, we might be heading for a new leg higher. Exciting times.