Crypto Surge Drives $530M Short Liquidations, Bitcoin Jumps 6%

In the past 24 hours, a significant surge in cryptocurrency prices led to over $500 million in short liquidations. This surge was driven by optimism surrounding a potential easing of tariffs between the U.S. and China, which boosted market sentiment and triggered the largest short liquidations since October.

Bitcoin (BTC) experienced a notable rise, climbing from $88,000 on Tuesday to above $93,500 during Asian morning hours. This upward movement in Bitcoin's price catalyzed a broader market rally, with ether (ETH), Cardano’s ADA, and dogecoin (DOGE) all increasing by 14%. Other major tokens, including Solana’s SOL and XRP, saw gains of 7%, with all tokens in the top hundred by market cap showing positive movement.

Sui Network’s SUI, UniSwap’s UNI, and Near Protocol’s tokens also demonstrated strength, with gains of up to 18%. Memecoin mog (MOG) saw a remarkable 30% increase, continuing its trend of mirroring ETH’s movements.

Nearly $530 million in short positions, which are bets on lower prices, incurred losses as leveraged bets were unwound. The majority of these short liquidations occurred on Bybit, totaling $234 million, followed by Binance with $100 million, and Gate with nearly $70 million. The largest single liquidation order was an ETH futures position worth over $4.5 million on Binance.

Liquidations occur when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. This happens when a trader cannot meet the margin requirements for a leveraged position, meaning they do not have sufficient funds to keep the trade open.

The recent uptick in crypto markets was influenced by statements from Trump, who indicated a willingness to be “very nice” to China in trade talks and suggested that tariffs could be reduced if a deal is reached. This news tempered the cautious sentiment among traders, who had been concerned about an escalating trade war.

According to the COO of BTSE, Jeff Mei, fears of an escalating trade war have diminished as traders anticipate a trade agreement between the U.S. and China in the coming weeks. However, the duration of this positive sentiment remains uncertain. Mei also noted that the likelihood of rate cuts and a depreciating U.S. dollar are high, which could explain Bitcoin's recent surge. If the U.S. dollar weakens, Bitcoin may become a major store of value as other currencies also depreciate.