Market sees massive short liquidations
Short traders got hit hard over the last 24 hours. The data shows $414.65 million in total liquidations, with short positions making up 77.67% of that. That’s about $322 million from shorts alone. I think this is the highest level we’ve seen since October 10, what some people call Black Friday in crypto circles.
Around 109,672 traders faced liquidations during this period. The biggest single hit was on HTX exchange—a BTC-USDT position worth $91.33 million got closed forcibly. That’s a massive position by any measure.
Institutional money flows back in
What’s interesting here is the institutional angle. US spot Bitcoin ETFs recorded net inflows of $471 million on January 2. That’s a pretty sharp reversal from the $348 million outflow we saw on December 31. It seems like institutional appetite came back quickly after the New Year break.
Cumulative net inflows into these ETFs have reached $57.08 billion now. Total net assets stand at $116.95 billion, which represents about 6.53% of Bitcoin’s total market cap. That’s not nothing.
The squeeze really highlighted a divide between institutional and retail positioning. While retail traders had crowded into short positions ahead of the move, institutional traders held a net long position at 76.52%. Maybe the smart money saw something coming that smaller players missed.
Prices move sharply higher
Bitcoin climbed to trade around $93,700, recovering from that consolidation phase that dominated late December. Altcoins posted even stronger gains, which is often the case in these moves. XRP led the surge at 10.8%, followed by Ethereum and Solana at 0.8% and 0.5% respectively.
On a weekly basis, gains were more pronounced. XRP was up 28.8%, Solana up 11.8%, and Ethereum up 9.6%. The 12-hour liquidation data showed particularly intense activity—$345.15 million in total liquidations during that window, with $305.43 million coming from short positions.
Exchange breakdown shows uneven pain
The pain wasn’t evenly distributed across exchanges. HTX bore the brunt of the squeeze, recording $108.35 million in liquidations with a staggering 96.05% from short positions. This suggests their user base had been heavily positioned for a downturn.
Hyperliquid, which is favored by more sophisticated traders, showed a similarly lopsided 87.1% short ratio. Even experienced market participants got caught on the wrong side.
Binance, the largest exchange by volume, recorded $95.65 million in liquidations but with a comparatively lower 63.4% short ratio. This reflects its more diverse user base, I suppose. The pattern points to a market where bearish conviction had built up broadly, leaving traders across platforms vulnerable when sentiment flipped.
The cascade effect
The wave of short liquidations created a cascading effect throughout the market. As prices rose, bearish traders were forced to close positions at a loss, which in turn drove prices higher and triggered further liquidations. This feedback loop amplified the upward momentum across major cryptocurrencies.
Crypto analyst Ardi noted on X that “short covering frenzy plus volume delta exploding gave Bitcoin its best price action in a long time.” He observed that nearly $1 billion in shorts had been liquidated over recent days, adding that the liquidation map remains lopsided with heavy short positions stacked above current prices while few long clusters sit below.
The 24-hour long/short ratio has now balanced to 49.99% long versus 50.01% short, indicating the immediate squeeze has been absorbed. According to Ardi, $94,500 is the pivotal level to watch. A close and hold above could trigger further unwinding of overhead short positions.
It’s worth noting that this kind of move can shake out weak hands and reset market positioning. But whether it signals a sustained trend or just a short-term squeeze remains to be seen. The institutional inflows are encouraging, but crypto markets have a way of surprising everyone.
