Bitcoin News Today: Bitcoin's $90K Short Squeeze Sparks $100B Market Swing in Hours

Bitcoin's market value swung dramatically on December 17, 2025, as it briefly added about $56 billion before losing nearly $100 billion in hours. The volatile movement was driven by leveraged positions, short squeezes, and fragile liquidity conditions rather than any major news or spot demand. This extreme volatility highlighted ongoing fragility in the crypto market, with leveraged traders bearing the brunt of the swings.

The initial surge in Bitcoin occurred as the price pushed toward the $90,000 level, triggering a short squeeze that forced traders to close leveraged short positions. This forced buying accelerated the price higher, creating a self-reinforcing cycle. As the price reached $90,000, new traders entered the market, many opening leveraged long positions that later became vulnerable when the rally stalled.

However, the momentum quickly reversed as traders began exiting their long positions. Key support levels broke, leading to a cascade of liquidations that pushed Bitcoin back toward $86,000 within a few hours. Over $400 million in leveraged positions were liquidated, with Ethereum and other altcoins also experiencing significant losses. The largest liquidation occurred on Hyperliquid, a decentralized perpetual exchange, where a $11 million HYPE/USD position was wiped out.

Why the Standoff Happened

The sharp price swings were driven by a combination of high leverage and thin liquidity, which made the crypto market especially vulnerable to rapid, large moves. Liquidation data shows that Bitcoin's price spike was fueled by a dense cluster of leveraged short positions positioned above $90,000. When the price moved higher, those shorts were forced to close, requiring them to buy Bitcoin, which pushed the price even faster.

The short squeeze created a powerful upward momentum, but the rally lacked a strong foundation of spot buying. When the price began to fall, the leveraged long positions that had been opened during the breakout quickly became unstable. Key support levels were breached, triggering automated liquidations and further downward pressure on the price.

Market analysts noted that the fragility was compounded by ETF outflows and cautious risk sentiment, which made it harder for the market to stabilize during the rapid reversal. The sharp price movements also raised concerns about potential market manipulation, though others pointed to algorithms cleaning up thin liquidity as a possible explanation according to market analysis.

How Markets Reacted

The Bitcoin volatility spilled over into other cryptocurrencies and even impacted traditional markets. Ethereum and XRP followed similar patterns, with both seeing sharp price swings and large liquidations. Ethereum fell below the 50-day and 200-day EMA levels, reinforcing a bearish trend. XRP hovered near $1.90, with the RSI approaching oversold territory.

The Texas Pacific Land Corporation (TPL) also made headlines during this period, surging 6.21% on news of a strategic deal with Bolt Data & Energy. TPL, one of the largest landowners in Texas, announced plans to develop large-scale data center campuses on its land. The company invested $50 million in Bolt as part of the agreement, which also included an equity stake and water supply rights.

The stock's surge came as investors speculated about the company's potential to become a major player in the AI compute infrastructure space. TPL's CEO said the collaboration with Bolt is designed to position West Texas as a key location for global AI infrastructure, leveraging the company's nearly one million acres of land according to company statements.

What Analysts Are Watching

Market participants are now watching closely for signs of stability in the crypto market. Analysts point to the role of leverage and liquidity in creating the recent volatility and suggest that the market may need to find a new equilibrium. The lack of sustained spot buying during the Bitcoin rally highlighted the risks of overreliance on leveraged positions, particularly in thinly traded markets.

Regulatory developments are also in focus, with the Trump administration recently signing an executive order allowing crypto into 401(k) retirement plans. The move is expected to increase institutional and retail adoption of digital assets, though many investors are opting for ETFs rather than direct exposure. Meanwhile, Texas continued to expand its involvement in Bitcoin, doubling its holdings through a second $5 million purchase of IBIT. The state now holds $10 million in Bitcoin, positioning itself as a growing hub for cryptocurrency mining and digital asset infrastructure. The state's strategic investment reflects its broader economic strategy, which includes attracting AI and blockchain firms to its energy-rich infrastructure according to state officials.