Bitcoin News Today: Ethereum Shorts Liquidated $259M as Price Surges 10%

The cryptocurrency market experienced a significant short squeeze in early August 2025, as prices of major assets surged and triggered massive liquidations of leveraged positions. In a single hour, nearly $247 million in derivatives contracts were forced to close, with $207 million attributed to short positions and $40 million to longs [1]. The scale of liquidations underscored the imbalance in market positioning, as traders who had bet against the market found themselves on the wrong side of a sharp rally.

Ethereum emerged as the most impacted asset during the adjustment. Over $147 million in Ethereum-related positions were liquidated, a figure that significantly outpaced Bitcoin’s $42.8 million in losses. The price of ETH climbed rapidly, surging from $4,200 to $4,650 within four hours, a 10% move that triggered a wave of margin calls [6]. Additional reports indicated that Ethereum came close to breaking its all-time high, prompting $259 million in short liquidations [3]. The asset’s dominance during the rebound highlighted a growing shift in market dynamics, where Ethereum is increasingly outpacing Bitcoin in terms of leverage activity and investor attention.

Bitcoin also saw a strong price rebound, breaking the $111,800 support level and climbing to $114,800. This movement led to over $230 million in liquidations in derivatives markets [5]. The support level had previously been a record high in May, and the recovery signaled a potential bullish reversal after a week-long downtrend from $124,500 [6]. The sharp price movement was preceded by a sell-off in the days leading up to Federal Reserve Chair Jerome Powell’s speech, which intensified volatility for leveraged traders [6].

Powell’s comments on rising downside risks to employment and the potential for sharper-than-expected job losses fueled speculation about a potential rate cut in September. This expectation drove a broad rally in risk assets, including Bitcoin and Ethereum, with the probability of a rate cut increasing to 90% after the speech [4]. Analysts suggested that the macroeconomic environment could further support a continuation of the bullish trend, especially if the Fed signals additional policy easing.

Despite a slight pullback in Bitcoin to $114,800 after touching $115,700, open interest in derivatives markets hit a four-day high, indicating strong leverage on the long side [6]. Institutional activity also played a role, as net short volumes approached record levels seen in 2024, raising the possibility of a sustained short squeeze if bullish momentum continues [9].

The overall surge in trading activity was evident as 24-hour trading volume increased by 15% to $189.7 billion [1]. This rise in volume suggested that traders were actively capitalizing on the sharp price swings, with many using the volatility to enter and exit positions quickly. The pattern of liquidations and price movement reinforced the idea that bearish sentiment had been overstated, with the market reacting strongly to both macroeconomic signals and regulatory developments.

The interconnected nature of crypto and traditional finance became increasingly apparent, as the crypto market mirrored the expectations and risks associated with global monetary policy. As the Fed’s policy outlook continues to evolve, so too does the risk profile for leveraged traders in the derivatives space, with short positions now facing heightened pressure from a market that is increasingly driven by leverage and momentum.

[1] Crypto Economy, Crypto Market Sees Major Short Squeeze as Liquidations Soar [https://crypto-economy.com/crypto-market-sees-major-short-squeeze-as-liquidations-soar/](https://crypto-economy.com/crypto-market-sees-major-short-squeeze-as-liquidations-soar/)

[3] Yahoo Finance, Quarter Billion in Ethereum Shorts Get Rekt [https://finance.yahoo.com/news/quarter-billion-ethereum-shorts-rekt-185727958.html](https://finance.yahoo.com/news/quarter-billion-ethereum-shorts-rekt-185727958.html)

[4] CoinDesk, Ether Likely to Top $5K [https://www.coindesk.com/markets/2025/08/23/ether-likely-to-top-usd5k-btc-eyes-record-high-as-powell-sparks-rally-watch-for-dat-deal-risks-asset-managers](https://www.coindesk.com/markets/2025/08/23/ether-likely-to-top-usd5k-btc-eyes-record-high-as-powell-sparks-rally-watch-for-dat-deal-risks-asset-managers)

[5] FastBull, Bitcoin (BTC) Spikes, $230M Liquidated After Powell's [https://m.fastbull.com/news-detail/bitcoin-btc-spikes-230m-liquidated-after-powells-rate-4340928_0](https://m.fastbull.com/news-detail/bitcoin-btc-spikes-230m-liquidated-after-powells-rate-4340928_0)

[6] Yahoo Finance, Bitcoin and Ether's Swift Spike Prompts $375M in Crypto [https://finance.yahoo.com/news/bitcoin-ethers-swift-spike-prompts-145927049.html](https://finance.yahoo.com/news/bitcoin-ethers-swift-spike-prompts-145927049.html)

[9] AInvest, Institutional Whales Steer Ethereum's Bullish Comeback [https://www.ainvest.com/news/ethereum-news-today-institutional-whales-steer-ethereum-bullish-comeback-fed-signals-2508/](https://www.ainvest.com/news/ethereum-news-today-institutional-whales-steer-ethereum-bullish-comeback-fed-signals-2508/)