Ether's 20% Surge Triggers $750M in Short Liquidations

A broad crypto rally, led by ether’s (ETH) 20% surge, triggered more than $750 million in short liquidations in the past 24 hours, marking the highest single-day total since 2023 for bearish trades. This significant event was driven by major altcoins, which jumped 10%–20% in a few hours starting late Thursday.

Ether led the charge with a 20% rise, pushing past $2,000 for the first time since early March. Dogecoin (DOGE) and Cardano’s ADA also saw substantial gains, zooming more than 10%, fueled by bullish sentiment and momentum trading. Solana’s SOL, BNB, and XRP also experienced notable increases, up at least 7%.

Liquidations occur when an exchange forcibly closes a trader’s leveraged position due to insufficient margin. This happens when a trader cannot meet the margin requirements for a leveraged position, meaning they don't have sufficient funds to keep the trade open. Large-scale liquidations can indicate market extremes, such as panic selling or buying. A cascade of liquidations might suggest a market turning point, where a price reversal could be imminent due to an overreaction in market sentiment.

The uptick in crypto markets came as bitcoin surged above $100,000 on Thursday, with sentiment buoyed by a trade deal between the U.S. and the UK. The late Thursday wipeout ranks among the most severe since Bitcoin’s run to $93,000 in March, which saw bears lose over $550 million in a weekend squeeze. In April, a similar rally in ETH and DOGE erased $500 million in shorts, but this move surpassed both, showing renewed risk appetite and a crowded short trade setup.

Data shows that the largest share of losses came from Binance and OKX, which accounted for more than $500 million in liquidations. ETH alone was responsible for over $310 million, while bitcoin-tracked futures led at $375 million. The short squeeze on ETH came as the asset had been rangebound for a few weeks amid falling institutional interest and retail sentiment. However, Ethereum’s recent Pectra upgrade may be giving traders a reason to bet on the asset, some say.