Bitcoin News Today: Bitcoin Surges Past $120K, Triggering $50M Short Liquidation Squeeze

Over $50 million in Bitcoin short positions were liquidated within two hours in late July and early August 2025, as the cryptocurrency surged past key resistance levels, triggering a significant short squeeze in the market. The rapid price increase, which pushed Bitcoin above $120,000—a level that had long served as both a psychological and technical barrier—prompted major exchanges such as Binance, Bybit, and OKX to report a sharp spike in liquidation activity [1]. The move led to the forced closure of leveraged short positions, with reports indicating that over $30 million in BTC short positions were liquidated in the final 60 minutes of the two-hour window [2].

The liquidation primarily occurred on major derivatives exchanges, which displayed real-time dashboards confirming the scale of the event. The price surge caused immediate corrections in funding rates, favoring long positions and rewarding traders who had bet on Bitcoin’s upward movement. Experts observed that short squeeze phenomena are not uncommon in the crypto market, but the speed and scale of this particular event led to a rapid liquidity adjustment [2].

The impact extended beyond Bitcoin. Ethereum also experienced significant short liquidations, with over $110 million in short positions wiped out in a single hour as ETH prices surged past $4,000. However, Bitcoin remained the primary driver of the market's bullish momentum [3]. Analysts attributed the price action to a combination of institutional buying, retail enthusiasm, and algorithmic trading strategies, all of which amplified the upward pressure on Bitcoin during the rally.

The liquidation event created a self-reinforcing cycle, as traders rushed to adjust their positions, further fueling upward price movement. This dynamic is typical in leveraged trading environments, especially when stop-loss orders are concentrated at specific price levels [2]. The event highlighted the risks associated with high-leverage short positions and underscored the fragility of bearish bets during strong bullish trends.

On-chain data and on-chain sentiment also reflected growing optimism among retail traders. Discussions on platforms like Reddit suggested that many market participants viewed the liquidation of shorts at key levels as a positive sign, potentially supporting further price appreciation [4]. However, some traders cautioned that such rapid and large-scale movements could lead to corrections, as traders begin to take profits or as momentum fades.

The broader implications of the event included increased scrutiny from analysts and potential interest from regulators, particularly concerning market stability and exchange protocols for managing large price swings. The liquidation also emphasized the need for robust, data-driven monitoring systems to help mitigate the risks associated with future volatility.

Historical patterns indicate that similar liquidation events often occur during periods of sharp Bitcoin price movements, especially in times of low market liquidity such as weekends or during major news events. The timing of this event, occurring in a historically active period for crypto markets, raised questions about whether the broader market was entering a new phase of optimism or simply experiencing a temporary surge [4].

The Bitcoin short liquidation of late July to early August 2025 serves as a reminder of the high leverage and volatility inherent in cryptocurrency trading. It also demonstrated the interconnectedness of major crypto assets, as movements in Bitcoin often trigger similar patterns in other tokens. The scale of the liquidations revealed the extent of bearish positioning in the market prior to the rally, as traders had anticipated a return to lower prices. Instead, the market moved in the opposite direction, catching many short sellers off guard.

As the market continues to evolve, the lessons from this event may shape future trading behavior and risk management practices. Analysts emphasized the importance of balancing short-term momentum with long-term fundamentals, noting that factors such as adoption, regulation, and macroeconomic conditions will play a crucial role in determining Bitcoin’s future trajectory.

Source:

[1] Bitget, "Over $50 Million in Bitcoin Short Positions Liquidated in the Past Hour", https://www.bitget.com/news/detail/12560604905275

[2] Binance, "Latest BTCReclaims120K News, Opinions and Feed Today", https://www.binance.com/en/square/hashtag/BTCReclaims120K

[3] Coinpedia, "Crypto Short News – Latest Real-Time Updates", https://coinpedia.org/crypto-live-news/

[4] Reddit, "Daily Discussion, August 10, 2025", https://www.reddit.com/r/Bitcoin/comments/1mmaxrt/daily_discussion_august_10_2025/