Bitcoin News Today: Bitcoin's $10M Short Liquidated as Price Surges Past $120,000

A massive $10 million Bitcoin short liquidation occurred on Bybit in August 2025, marking one of the largest single-order liquidations in the platform’s history. The event unfolded as Bitcoin’s price surged beyond $120,000, triggering the automatic closure of undercollateralized short positions. This liquidation was part of a broader global phenomenon, with total crypto liquidations reaching $5.01 billion across exchanges [1]. The scale of the event highlighted the deep institutional involvement in the market, as leveraged positions were heavily impacted by the rapid directional shift [1].

Bybit reported a total of $102 million in liquidations during the period, with the $10 million BTC short being the most significant individual incident. The liquidation was not isolated—across multiple platforms, traders saw substantial losses as Bitcoin and Ethereum prices surged amid strong institutional buying pressure. Ethereum, too, faced liquidations as broader market volatility intensified, with prices surpassing $4,000 [1].

The event underscores the growing influence of institutional players in the cryptocurrency space. For example, $403 million in BTC-backed ETF shares were purchased, with BlackRock’s IBIT fund receiving more than $359 million in inflows. This suggests a notable shift in capital flows toward crypto assets, driven by institutional interest and confidence [1]. Arthur Hayes, co-founder of BitMEX, emphasized the importance of risk management in light of such large-scale liquidations, noting that seasoned operators must remain vigilant in volatile conditions [1].

The impact of the liquidation extended beyond Bybit, as other major exchanges reported significant turnover. Total liquidation volumes across platforms surpassed $219 million, with both long and short positions affected. The surge in Bitcoin prices and the speed at which the market moved indicated a strong bearish-to-bullish reversal, particularly among leveraged traders [1]. Analysts have pointed to the potential for tighter leverage controls in the future, as regulatory scrutiny intensifies amid these large-scale events [1].

Despite the volatility, Bybit continues to serve as a major hub for derivatives trading, offering USDT and USDC-settled options on key assets like Bitcoin and Ethereum. The platform has also been involved in other notable developments, including bounty distributions and a high-profile security incident involving alleged illicit fund movements. However, these events are distinct from the recent liquidation and do not directly affect its financial integrity [1].

As the broader crypto market remains in flux, Bitcoin’s dominance has dipped below 60%, indicating a growing interest in alternative cryptocurrencies. Meanwhile, rising U.S. federal debt, which has hit a record $37 trillion, has fueled speculation that institutional investment in Bitcoin may continue to grow [1]. Traders and analysts are closely watching how these dynamics unfold, particularly as new products and analytical tools emerge to navigate the increasingly complex market landscape [1].

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[1] https://coinmarketcap.com/community/articles/689d1ff2c655fb43cef96ce9/