This week, under the sudden surge in mainstream cryptocurrency prices, the crypto market experienced significant volatility in the East 8 Time Zone. Both long and short leveraged positions were rapidly liquidated, leading to a sharp increase in the scale of liquidations across the network. Data from CoinGlass and other liquidation dashboards indicates that in the past 60 minutes and the past 12 hours, liquidations were predominantly from short positions, reflecting a concentrated counterattack against previous short bets during the market reversal. Bitcoin broke through $96,000, and Ethereum surpassed $3,300 (according to a single source), which many traders viewed as a direct trigger point for a chain reaction of liquidations. This article will analyze the funding game and structural mismatch behind this round of liquidations from three dimensions: liquidation data, price linkage, and leverage risk.
Surge in One-Hour Liquidations and Concentrated Short Liquidations
● Funding Trends: According to data from CoinGlass and other liquidation dashboards, during the rapid price surge, the total liquidation amount across the network in the past 60 minutes was approximately $458 million, with short positions accounting for about $419 million and long positions about $39 million. The scale of passive liquidations of shorts significantly outweighed that of longs. This extreme ratio indicates that the market had previously leaned towards betting on a decline, and the price surge directly inflicted concentrated damage on these highly leveraged shorts.
● Time Dimension: Extending the perspective to the past 12 hours, according to single-source data, the total liquidation amount across the network was approximately $623 million, again dominated by short liquidations. This continuity suggests that this event was not a "one-minute coincidence," but rather a sustained expulsion of shorts over a period from short-term to several hours during the rising market.
● Rhythm Structure: From the combination of liquidation direction and scale, the typical path is that the price first triggers a batch of stop-losses and forced liquidations of nearby shorts during a small rebound, followed by further price increases driven by passive buying, which then adds more distant shorts to the liquidation chain, forming a "segmented, progressive" squeeze rhythm. High-leverage shorts often lack sufficient time to adjust their margin and stop-loss ranges in this rhythm, leading to passive exits at high prices.
● Data Boundaries: It is important to emphasize that the aforementioned breakdown of short and long positions and their scales is based on single-source tool platform statistics, and not authoritative liquidation data with industry-wide consensus. In particular, the fine structure of long and short splits may vary between different platforms, so it is essential to clarify the source attributes when using this data to avoid misinterpreting single-platform statistics as absolute truths for the entire market.
Breakthrough of Key Price Levels and Short Squeeze Structure
The rapid breakthroughs in Bitcoin and Ethereum prices are seen as the direct catalyst for this round of chain liquidations. According to single-source market data, Bitcoin's price once surged and broke through $96,000, while Ethereum surpassed $3,300. These two price ranges were previously regarded as significant resistance levels in technical analysis and market discussions, and many traders viewed them as the upper boundary of the "short safety zone." In actual trading, such positions often accumulate stop-loss orders, trigger orders, and platform liquidation thresholds, making it easy to form dense passive transactions once broken through with volume.
From the perspectives of technical levels and sentiment, when prices break above previous highs or key integer levels, it generates amplification effects in both directions: on one hand, the protective stop-losses of shorts and platform liquidation mechanisms are triggered, pushing prices higher through passive buying, creating a short-term "squeeze ladder"; on the other hand, the chasing-up sentiment is ignited, with new longs attempting to follow the breakout, but this portion of positions is usually more cautious, with their leverage multiples and holding periods differing significantly from those of the previously high-leverage shorts. This structural difference means that the dominant force in the market in a short time comes more from passive buying and squeezing out shorts, rather than from long-term funds actively chasing higher prices.
The claim that short positions are highly concentrated in the $92,000-$94,000 range, amounting to tens of billions of dollars, is currently viewed as market rumor in social media and community discussions, and research briefs have explicitly marked the statement "approximately $7 billion in short positions concentrated in this range" as pending verification information. In the absence of cross-verification from multiple platforms and public report support, such descriptions can only be cited as a slice of market sentiment and should not be treated as hard data to draw serious conclusions, nor should they be used to construct large trading decisions.
Extreme Sentiment and Price Volatility Amplified by High Leverage
In this round of liquidation events, the direction and time concentration of liquidation amounts reveal a typical emotional switching trajectory: after the market accumulated strong short sentiment during earlier corrections and macro uncertainties, short leveraged positions rapidly accumulated; however, once prices broke through the expected upper boundary, the concentrated short liquidations that occurred in a short time quickly pushed sentiment to the other extreme—from panic retreat to greedy pursuit of upward movement. The concentration of liquidations erupted within minutes to hours, essentially reflecting a leveraged position's amplified response to the emotional shift.
In the context of significant price increases and liquidation data predominantly from shorts, a typical mismatch pattern can be observed: on one side are the previously accumulated derivative shorts betting on a decline, while on the other side are spot buyers and low-leverage longs continuously following the upward trend. The buying demand from spot and low-leverage funds provides upward "fuel" for prices, while high-leverage shorts become passive "boosters," continuously repurchasing at higher prices during the forced liquidation phase, further squeezing the survival space of shorts in the same direction.
The crypto market is characterized by high leverage, low thresholds, and 24-hour continuous trading, which allows short-term sentiment to be repeatedly amplified in uninterrupted matching. The cooling period and risk repricing that can be completed in traditional markets through closing and overnight time are often compressed into a matter of minutes or even seconds in the crypto market. Especially during weekends or macro event vacuums, relatively thin liquidity means that large orders in a single direction can easily trigger larger price fluctuations and initiate a series of liquidations.
At the same time, there is currently a lack of authoritative statistical data on the total amount of liquidations and the number of liquidations across the network in 24 hours, and different data platforms have discrepancies in their statistical scope and criteria. Research briefs have clearly stated that larger scopes of "24-hour total liquidations" and "number of liquidations" are considered areas of information deficiency and should not be fabricated. Based on this premise, this article limits the citation of liquidation data to amounts and time periods with clear and verifiable sources, refraining from making any inferences or extended descriptions regarding larger time windows or more granular numbers, in order to maintain the boundaries and rigor of the analysis.
Nikkei Hits New Highs and the Squeeze Environment Under Multiple Narratives of Chip Benefits
According to a single source, the Nikkei 225 index recently reached a historical high, indicating that risk assets among major global stock indices are generally in a relatively strong operating state. In such an external environment, cryptocurrencies like Bitcoin often absorb risk appetite spillover from traditional markets due to their "high beta asset" characteristics. As mainstream stock indices continue to hit new highs, some cross-market funds are more inclined to seek excess returns in more volatile varieties, making the crypto market one of the options, thereby enhancing the tolerance and willingness to participate in the upward trend on an emotional level.
At the same time, according to a single source report, the U.S. has relaxed export controls on Nvidia's H200 chips, triggering a new round of heightened expectations for AI and computing power in the market. For the crypto industry, this narrative indirectly strengthens optimistic imaginations about related tokens and mining assets through the "computing power—mining—crypto assets" chain. Although this positive news does not have a rigorously proven direct causal relationship with this round of liquidations, in the context of macro risk appetite and the resonance of technology growth expectations, the market is more likely to provide a "rational explanation" for upward momentum, thereby reducing sensitivity to the risk of corrections.
In terms of macro policy expectations, former U.S. President Donald Trump recently reiterated that "Powell kills every market rally" (according to a single source), reflecting market divergence in expectations regarding Federal Reserve policy and liquidity environment. Some investors are concerned that future monetary policy will continue to maintain a tight stance, limiting the expansion space for risk asset valuations; while others bet that a potential shift towards easing will provide more abundant liquidity for the stock market and crypto assets. It is precisely under such uncertain expectations that once risk assets begin to rise, the side betting on a decline is often more vulnerable and more easily forced out during price fluctuations.
From the perspective of macro liquidity and risk appetite, when traditional stock indices are at historical highs, the narratives of technology and computing power are hot, and policy expectations are divergent, the crypto market becomes a natural field for risk appetite venting and hedging. High-leverage shorts in such an environment are essentially betting against a broader "global risk appetite." When this appetite is concentrated and released in a short time, the price breaking upward combined with structural leverage imbalance can easily lead to dramatic short squeeze scenarios.
The 21 Million Cap and the Misalignment of Short-Term Leverage Games
Returning to the design aspect of Bitcoin, the hard cap of 21 million coins (source A) is the core cornerstone of its monetary attributes and long-term value narrative. This scarcity, locked in at the code level, has led Bitcoin to be continuously packaged as "digital gold" or "store of value" against the backdrop of macro monetary overproduction and heightened inflation expectations. The halving cycle, difficulty adjustments, and long-term computing power investments further reinforce the market's pricing expectations regarding its long-term supply contraction and scarcity.
However, this round of concentrated liquidations occurred more in the high-leverage derivatives layer, reflecting the sharp divergence in short-term funding on price expectations and trading risks, rather than a fundamental denial of the long-term supply-demand pattern. Long-term supply contraction and scarcity narratives determine Bitcoin's value center across multiple cycles; while high-leverage short-term trading results in violent fluctuations around this center. Confusing the two often leads to the error of "using long-term logic to justify short-term full leverage," misapplying structural advantages as reasons for short-term high positions, thereby amplifying account risks.
In terms of risk identification and data usage, CoinGlass, CoinMarketCap, and other dashboard tools (according to a single source) provide traders with multidimensional data such as liquidation amounts, long-short ratios, market capitalization, and trading volume. Through these visual panels, investors can more intuitively observe the degree of leverage accumulation, liquidation density, and price linkage at a given moment, identifying potential extreme risk intervals. Combining this data with on-chain fund flows, changes in exchange reserves, and other information helps construct a more comprehensive risk profile, rather than relying solely on K-line prices or social media sentiment for one-sided bets.
For ordinary participants, a more robust approach is to simultaneously use on-chain data, derivatives data, and market data to form multidimensional cross-verification: when the concentration of liquidations is too high, one side of long and short positions is highly crowded, and prices are close to key technical levels, further increasing leverage means significant asymmetric risk for both long and short positions. In this case, reasonably reducing leverage multiples, controlling the size of single positions, and entering and exiting in batches is far more pragmatic than attempting to "precisely catch the bottom or escape the top."
Risk Repricing and Participation Strategies After Liquidations
This round of concentrated liquidations, primarily from shorts, reflects a clear fact at the data level: in the context of an overall warming macro environment, traditional stock indices hitting new highs, and the continuous fermentation of technology and computing power narratives, the market's bets on the downside potential of Bitcoin and other crypto assets were significantly excessive. The rapid price surge and breakthrough of key price levels exposed this directional misjudgment in a short time and was "forced liquidated" through the liquidation mechanism. High-leverage shorts bore the main costs in this process, also freeing up space for the subsequent rebalancing of long and short forces.
After Bitcoin and Ethereum broke through key price levels, subsequent fluctuations will not calm down. Experience shows that similar levels of breakthroughs often lead to prolonged periods of intensified volatility, and liquidation data will continue to dominate market sentiment and trading rhythm in the short term. When liquidations accumulate in one direction, short-term trends tend to persist; however, once liquidations turn or significantly cool down, prices may enter a new range of fluctuations. In this process, a snapshot of data at a single point in time is insufficient to support robust judgments; it is more important to observe its changing trajectory over time.
In the absence of authoritative 24-hour total liquidation amounts and number statistics, it is essential to base trading and risk control frameworks on verifiable data. For any "stunning numbers" that exceed publicly available statistics and are only circulated on social media, the most prudent approach is to treat them as sentiment indicators rather than decision-making bases. Avoiding being swayed by sensational data is the first step in protecting funds during periods of high volatility.
From a risk management perspective, in high-price and high-volatility markets, there are at least three "safety valves" worth adhering to: first, reduce leverage, as even if the directional judgment is correct, excessive leverage may lead to liquidation during brief pullbacks; second, diversify entry and position-building rhythms, smoothing out the cost of building positions through staggered buying or selling, thereby reducing the impact of misjudgments at a single point in time; third, continuously monitor liquidation and derivatives data dashboards, treating the degree of leverage accumulation and liquidation density as equally important risk indicators alongside directional choices. Only by participating moderately under the premise that both long-term logic and short-term data are acceptable can one improve survival rates in a highly volatile market.
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