Bitcoin Surges 5% to $118,000 Triggering $1 Billion Short Squeeze

Bitcoin's price surged to a new all-time high of $118,000 on Thursday, triggering the largest short squeeze of 2025. This dramatic price increase resulted in over $1 billion in short position liquidations within a 24-hour period, affecting approximately 237,000 traders globally. The liquidation event was particularly severe for short sellers, with $1.01 billion in liquidations, marking the largest short-side wipeout of the year.

The price surge began on Wednesday when Bitcoin first broke the $112,000 mark. It continued climbing on Thursday, briefly touching $116,553 before pushing even higher to $118,000. The liquidation event was concentrated on specific exchanges, with Bybit exchange recording the highest liquidation volume at $461 million, over 93% of which were short positions. Binance and HTX followed with $204 million and $193 million in liquidations, respectively. The single largest position liquidated was an $88.5 million BTC-USDT short on HTX exchange.

Bitcoin futures led the liquidations with $590 million, followed by Ethereum futures with $241 million. Other major cryptocurrencies also saw substantial liquidations, highlighting the aggressive betting against Bitcoin’s rise. Earlier in the week, some analysts had expressed skepticism about Bitcoin reaching new highs, noting a lack of follow-through strength when Bitcoin traded around $108,500. The sharp reversal caught many traders off guard, with crypto analyst Miles Deutscher posting “Bears in disbelief” on social media as prices soared.

Institutional demand continued to support Bitcoin’s rise, with U.S. spot Bitcoin ETFs accumulating over $50 billion in total inflows since their launch. Corporate treasuries, including those of MicroStrategy, Tesla, and GameStop, added to the buying pressure by accumulating Bitcoin for their balance sheets. The broader market rally also lifted all boats, with the cryptocurrency market capitalization increasing 4.4% to $3.63 trillion. Major altcoins posted gains alongside Bitcoin’s surge, with Ethereum rising 3.2% to $2,990, Solana gaining 2.7%, and XRP jumping 4.7% on speculation about potential ETF approvals.

Traditional markets also performed strongly, with the S&P 500 and Nasdaq Composite reaching record closes for the third time in four sessions. Gold futures hit an all-time high of $3,370 per ounce, creating favorable conditions for cryptocurrency gains. Bitcoin’s move came despite stronger-than-expected U.S. employment data, with June non-farm payrolls increasing by 147,000, beating forecasts of 110,000. The cryptocurrency briefly dipped below $109,000 following the jobs report but quickly resumed its upward trajectory.

Open interest on Bitcoin futures rose $2 billion in just four hours, with the long-short ratio favoring bullish bets at 52%, indicating traders expect further price increases. Bitcoin now trades in “price discovery” territory above previous all-time highs, where technical resistance becomes mostly psychological as no historical price levels exist for guidance. The Crypto Fear & Greed Index remained at 71, indicating “Greed” sentiment, down slightly from last week’s score of 73.