Author: Claude, Deep Tide TechFlow
Every miraculous escape requires short sellers as the sacrifice. Last night, Bitcoin surged with heavy volume intraday, briefly approaching the $70,000 mark. While investment communities were once again filled with the cry of 'the bull is back,' you might not know: last night witnessed the largest single-day short liquidation in crypto history, with over $1.1 billion in short positions liquidated across the network in a single day, shattering the historical record by a wide margin.
$1.1 Billion Shorts Liquidated Overnight, Setting a New Crypto Record
On the evening of August 19, BTC started its climb from around $64,000, gaining about 7% in one hour, with the intraday high touching $69,970, just a step away from the $70,000 threshold. This is the highest price since early June and the largest single-day gain since March.
Accompanying the surge was a bloodbath in the futures market. According to public futures data, liquidations across the network in the past 24 hours amounted to approximately $1.345 billion, involving 105,000 traders. Of this, short liquidations were about $1.191 billion, while long liquidations were only $153 million. In the most intense hour, the network saw $1.194 billion in liquidations, with short positions accounting for 93.5%.
By coin, Bitcoin short contracts were liquidated for roughly $662 million in 24 hours, and Ethereum shorts about $366 million. Leveraged positions betting on a decline were almost all wiped out at the same moment. Several whale positions on Hyperliquid, totaling nearly $200 million (high-leverage large holders), were also completely liquidated.
Liquidation itself accelerates price movement. Short liquidations mean forced buying to cover positions, creating a self-reinforcing feedback loop where higher prices trigger more liquidations, which in turn drive prices even higher.
Simultaneously, data from multiple sources indicates this is the single largest short liquidation day for Bitcoin.
White House Summit Just a Spark, the Catalyst Came from Bond Markets
The market attributed the sharp rise to two overlapping positive factors.
One was news-driven. On August 19, Trump met with executives from the crypto industry including Coinbase, Payward (Kraken's parent company), and Blockchain.com at the White House, raising market optimism about a regulatory shift.
The other was more fundamental.
On the same day, the U.S. Treasury Department announced a direct doubling of the liquidity support ceiling for long-term Treasury bond repurchases, increasing the per-operation limit from $2 billion to at least $4 billion, effective September 9.
From the crypto community's perspective, this is a more tangible signal than the summit: macro liquidity is loosening towards risk assets.
Data also confirms institutional buying. U.S. spot Bitcoin ETFs saw net inflows of $297.6 million on Monday and an additional $189 million on Tuesday; funding rates have climbed to a 20-month high. With longs crowded and shorts even more so, once the price starts moving, liquidation dominoes automatically take over.
The Last Major Short Liquidation Dates Back to 5.19
Old-timers surely remember '5.19' in May 2021: China explicitly banned financial and payment institutions from conducting virtual currency-related business. In the ensuing panic, Bitcoin plummeted from above $40,000 to near $30,000 within a day, with network-wide liquidations around $7 billion in 24 hours, setting a record at the time.
The 5.19 crash liquidated longs, washing away approximately $7.56 billion in leveraged long positions in an instant. However, in the following days, amidst the panic, a massive number of traders frantically added leveraged shorts at the bottom, only to encounter an extremely violent retaliatory rebound.
According to K33 Research citing Coinglass data, about $757 million in short positions were wiped out in a single day, becoming the largest single-day short liquidation for BTC perpetuals in history.
And it was this record that was broken yesterday.
After Major Short Liquidations, Prices Often Grind a Bottom for Weeks
If we must rely on historical parallels, major short liquidations often signal a mid-term consolidation bottom being thoroughly solidified. The deleveraging and position unwinding that follow, along with the time needed for macro liquidity to transmit to crypto, require several weeks of cold, hard consolidation and accumulation of strength.
Will this time be the same?
Currently, Bitcoin is around $69,200, with its 24-hour gain narrowing to 7.6% (as of the morning of August 20). Sentiment indicators remain hesitant: the Fear & Greed Index is at 46, still in the 'Fear' zone; on Polymarket, the probability of Bitcoin reaching $70,000 this month has jumped from before the surge to about 70%.
IG Chief Technical Analyst Axel Rudolph observed: Driven by short covering, Bitcoin is advancing towards $70,000, indicating buyer confidence is recovering. However, the key test for this rally is whether it can maintain momentum and challenge $75,000.
Times are different. History provides the script but does not guarantee the ending. Do not go all-in on 'the bull is back' in one shot.
