Bitcoin Shorts Face Massive $1 Billion Liquidation as Price Soars to New Highs

Record-Breaking Liquidations Hit Crypto Market

Bitcoin short-sellers experienced a devastating blow on Thursday as the cryptocurrency surged to unprecedented all-time highs, resulting in over $1 billion in short positions liquidated within 24 hours. The massive liquidation event impacted 232,149 traders across the crypto market.

According to CoinGlass data, $1.01 billion in crypto short positions were wiped out, with Bitcoin shorts accounting for approximately $570 million of the total liquidations. Ethereum shorts contributed an additional $206.93 million to the liquidation carnage.

Bitcoin Reaches New All-Time High Above $116,000

The liquidations occurred as Bitcoin established a new record high for the second consecutive day. After reaching $112,000 on Wednesday, Bitcoin climbed even higher to $116,500 on Thursday. Ethereum also participated in the rally, surging to $2,990 on Thursday.

The cryptocurrency market capitalization spiked 4.4% over the past 24 hours, reaching $3.63 trillion according to CoinMarketCap data. This surge caught many bearish traders off guard, leading to the significant liquidation event.

Crypto Industry Reacts to Massive Short Squeeze

The crypto community responded with notable commentary about the liquidation event. Crypto analyst Miles Deutscher described the situation as "Bears in disbelief," highlighting the unexpected nature of the price surge.

Crypto trader Daan Crypto Trades characterized the event as a "MASSIVE Short squeeze on BTC & ETH," emphasizing the scale of the liquidations. Another trader, Velo, noted the significant liquidation event and commented that "Lots of emails are being sent," likely referring to margin call notifications.

Market Sentiment Remains in Greed Territory

The Crypto Fear and Greed Index held steady on Thursday at a "Greed" score of 71 out of 100, representing only a two-point decline from the previous week's score of 73. This indicates that despite the volatility, market sentiment remains optimistic about cryptocurrency prices.

Historical Context of Crypto Liquidations

While Thursday's liquidation event was substantial, it wasn't the largest on record. One of the most significant crypto liquidation events occurred on February 3, when over $2.24 billion was liquidated amid growing concerns of a global trade war after US President Donald Trump signed an executive order to impose import tariffs.

Mixed Analyst Predictions Before the Surge

Earlier this week, crypto analysts were divided on Bitcoin's potential to reach new highs. Bitfinex analysts expressed skepticism on Tuesday, noting that Bitcoin traders were showing a "lack of follow-through strength" as BTC struggled to break its current all-time high level.

The analysts stated that "Bulls are hesitant or unable to push prices significantly higher without fresh catalysts or clearer macro signals," as Bitcoin traded around $108,500 at the time.

Bullish Voices Proved Correct

However, some analysts maintained bullish outlooks. MN Trading Capital founder Michaël van de Poppe had predicted that "The inevitable breakout to an ATH on Bitcoin might even happen during the upcoming week," which proved accurate.

Future Risk Assessment

Looking ahead, traders appear to be betting on continued price stability or further upward movement. However, risk remains in the market, with approximately $2.11 billion in long positions at risk of liquidation if Bitcoin retraces to Wednesday's price level of $112,000.

Market Outlook

The massive liquidation event demonstrates the volatile nature of cryptocurrency markets and the risks associated with leveraged trading. As Bitcoin continues to establish new all-time highs, traders on both sides of the market remain vigilant for potential price movements that could trigger additional liquidation events.

The cryptocurrency market's recent performance suggests continued institutional and retail interest, though investors should remain cautious about the inherent risks in digital asset trading. The significant liquidation of short positions indicates that bearish sentiment was quickly overwhelmed by bullish momentum, leading to substantial losses for traders betting against Bitcoin's price appreciation.