A massive Bitcoin short squeeze triggered nearly $1 billion in liquidations across the crypto market Thursday, marking the largest squeeze since 2021. The sudden surge propelled Bitcoin (BTC) above the $100,000 mark for the first time in months, shaking out over-leveraged traders and reigniting bullish momentum across digital assets.
The spike came after weeks of stagnant trading, catching many short sellers off guard. Ethereum (ETH) also broke out, soaring past a key resistance level at $2,100 and contributing to widespread market volatility.
Short Sellers Burned as Bitcoin Tops $100K
Thursday’s rally was one of the most dramatic in recent memory. According to Coinglass, more than $964 million in crypto futures were liquidated within 24 hours. Of that, $834 million came from short positions—bets that prices would fall—making it the largest Bitcoin short squeeze event in over three years.
Bitcoin alone accounted for $416 million in liquidations, including one massive $11.97 million BTC/USDT position on Binance. At the height of the frenzy, Bitcoin surged past $100,000 and briefly touched $102,000 before pulling back slightly. This marks the first time Bitcoin has traded in six-figure territory since early February.
The total crypto market cap also soared, hitting $3.3 trillion, its highest level since March.
Trade Deal Sparks Risk-On Sentiment
What triggered this historic Bitcoin short squeeze? A key catalyst was a newly announced U.S.-UK trade agreement. President Donald Trump described the deal as the beginning of “more global partnerships,” a comment that appeared to boost sentiment across risk assets, including crypto.
The renewed optimism came amid an already fragile market dynamic, with many traders positioned bearishly after weeks of consolidation. The sudden bullish reversal ignited a classic short squeeze—forcing short sellers to buy back their positions to cover losses, which only intensified upward momentum.
Ethereum Joins the Breakout
Ethereum followed closely behind Bitcoin’s move, surging past $2,100 after struggling for weeks. Despite concerns over the recent Pectra upgrade and the distracting rise of meme coins, ETH managed to outperform most major altcoins.
According to Santiment, an on-chain analytics firm, the Bitcoin short squeeze also benefited Ethereum, which saw $259 million in short liquidations. The firm called the move “contrarian,” noting that the market often reverses when retail sentiment hits extremes—a pattern that played out once again.
FOMO Returns, But for How Long?
As Bitcoin’s breakout reverberates through the market, analysts warn of a potential cooldown. While optimism is high, the rally was partially fueled by retail FOMO (fear of missing out) and aggressive media coverage, both of which have historically preceded short-term corrections.
Santiment suggested that the recent price spike could mark the beginning of another speculative cycle. However, with Bitcoin above $100K and the largest short squeeze since 2021 behind us, the path forward may depend on macroeconomic developments and continued institutional support.
Market Outlook After the Squeeze
The crypto market’s recovery has reignited interest in digital assets, especially among sidelined investors waiting for a signal. Still, whether this breakout proves to be a sustained uptrend or a temporary blowoff remains to be seen.
With Bitcoin reclaiming $100,000 and Ethereum showing renewed strength, all eyes are now on the Federal Reserve, inflation data, and geopolitical headlines that could shape the next phase of this volatile market.
For now, the Bitcoin short squeeze stands as a reminder of the crypto market’s explosive potential—and its unforgiving nature for those caught on the wrong side of momentum.
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