Bitcoin has shattered previous records, soaring past $118,000 and delivering a massive blow to traders who were betting against the cryptocurrency. In just 24 hours, over $1.13 billion worth of positions were wiped out across the market with a staggering $1.01 billion from short sellers alone. This marks the largest short-side liquidation event in 2025 so far.

Short positions involve borrowing assets to sell at a higher price, hoping to buy them back cheaper. However, when prices rise unexpectedly, traders are forced to close these positions at a loss, leading to what’s called a short squeeze. That’s exactly what happened here, with nearly 90% of all liquidations coming from short bets.

Massive Liquidations Across Crypto Exchanges

Roughly 237,000 traders were affected by the surge, with the largest individual liquidation being an $88.5 million BTC-USDT short on the HTX exchange. The brunt of the damage was felt across major trading platforms:

• Bybit took the hardest hit, recording $461 million in total liquidations, with 93% being shorts.
• HTX followed closely with $193 million in losses.
• Binance, the world’s largest crypto exchange, saw $204 million in liquidations.

The majority of liquidations came from Bitcoin futures, which accounted for $590 million, while Ether futures saw around $241 million in wiped-out positions.

Open Interest and Bullish Sentiment Rise

Alongside the liquidations, open interest, the total number of outstanding derivative contracts on BTC futures rose by $2 billion in just four hours. This indicates fresh capital is entering the market, mainly to back bullish positions. In fact, the long-short ratio now sits at 52% in favour of longs, reflecting rising confidence in continued price gains.

This kind of short liquidation event is reflexive, meaning it fuels even more price increases. As short positions are closed out, assets are bought back at higher prices, pushing the market up even further. This accelerates the rally and can lead to panic among bearish traders.

Market Outlook and Broader Crypto Rally

The surge in Bitcoin price comes amid renewed optimism in the financial markets. Recent signals from U.S. policymakers suggest possible easing in monetary conditions, while global equities remain strong, both factors supporting risk-on assets like cryptocurrencies.

Not just Bitcoin, but other major tokens also benefited from the positive momentum:

• Ether, the second-largest cryptocurrency, gained significantly.
• XRP, Dogecoin, and Solana (SOL) also saw price increases of up to 5% based on their own unique market narratives.

With Bitcoin setting fresh all-time highs, the crypto market is once again in the spotlight. Traders and investors are now watching closely to see if this bullish momentum will sustain or if another correction is around the corner.

Bitcoin’s explosive rise past $118,000 has shaken the crypto markets, catching short sellers off guard and triggering one of the largest liquidation events of the year. The move reflects not just a strong technical breakout, but also growing confidence across the broader market. As bullish bets rise and more capital flows into crypto, the coming weeks could prove pivotal for Bitcoin and its peers.