The cryptocurrency market experienced a major short squeeze between August 19 and 20, resulting in roughly $3.5 billion in total liquidations and adding approximately $280 billion to the total crypto market capitalization.
During the 24-hour period, about $3 billion in short positions were vaporized as Bitcoin surged, while long liquidations reached roughly $264 million. Bitcoin broke out of a six-week trading range with an intraday gain of about 8%, peaking at $71,396.50 to mark its highest price since early June. At one point, more than $1 billion in short positions were liquidated within a single hour.
Data tracked by Coinglass showed that Binance led the platforms with approximately $518 million in liquidations. Hyperliquid followed closely with roughly $513 million, and Bybit recorded about $303 million. The high liquidation volume on decentralized perpetual futures exchange Hyperliquid highlighted shifts in leveraged trading activity over the past year.
This event reversed the dominant pattern seen earlier in the year. In June, major liquidation events totaling $1.8 billion and $1.76 billion were primarily driven by long positions getting wiped out as traders leaned bullish. Ahead of the August breakout, bearish sentiment had accumulated during weeks of sideways price action, leaving many short positions vulnerable.
The $280 billion increase in total crypto market capitalization reflected a rapid repricing of assets across the digital asset ecosystem as short positions unwound and new buying entered the market. Additionally, crypto-related equities rallied alongside spot prices, indicating a broader shift in risk appetite.
