Crypto Markets See $478 Million Liquidations as Short Squeeze Fails to Lift Prices

A wave of roughly $478.23 million in forced liquidations rippled through crypto derivatives markets over the past 24 hours, with short positions taking a slightly larger hit—an outcome that points to a partial 'short squeeze' rather than a clean, demand-driven breakout.

The liquidation split underscored that dynamic: about $232.35 million in long positions were wiped out versus $245.88 million in shorts, putting short liquidations at 51.4% of the total. The imbalance was modest, but it mattered because it suggested the rebound impulse was amplified by traders being forced to buy back shorts, not solely by fresh spot accumulation.

Despite the squeeze-like flush, major assets failed to confirm a decisive trend reversal by the close. Bitcoin (BTC) was last down 0.66% at $76,822, while Ethereum (ETH) slipped 0.35% to $2,099. The takeaway for many desks was that shorts were cleared first, but spot market follow-through remained hesitant—often a recipe for choppy price action.

Altcoins broadly lagged. XRP (XRP) fell 0.71%, Solana (SOL) dropped 1.54%, and Dogecoin (DOGE) declined 1.30%, while Tron (TRX) bucked the tape with a 1.85% gain. The dispersion reinforced the view that the market was rotating selectively rather than rallying in unison.

Market share metrics hinted at mild diversification away from a pure BTC-led move. Bitcoin dominance eased to 60.01% (down 0.05 percentage points), while Ethereum’s share ticked up to 9.88% (up 0.02 points), suggesting some capital was spreading into the second-largest asset and a handful of idiosyncratic altcoin trades.

Liquidations were concentrated where liquidity is deepest. Bitcoin accounted for roughly $205.8 million in liquidations over 24 hours and also led the largest liquidation clusters on shorter timeframes, reflecting how quickly directional shifts get expressed in BTC perpetuals and futures. Ethereum followed, with about $33.52 million flagged in a four-hour liquidation heatmap—further evidence that the volatility shock was driven more by 'risk appetite' swings than by a single narrative trade.

By venue, around $16.47 million was liquidated over the most recent four-hour window, with Binance leading at $6.83 million, or 41.48% of the total. Notably, 62.45% of those Binance liquidations were shorts—consistent with rebound pressure emerging at the core of the market. Hyperliquid diverged sharply, where long liquidations reportedly made up 82.82%, highlighting that positioning and participant mix differ across venues and that consensus direction remains fragile.

Overall spot trading volume was estimated at about $67.57 billion, while derivatives volume came in around $523.60 billion, down 8.29% day over day—an indication that some overheated short-term leverage was being unwound. At the same time, DeFi-related activity rose 8.46% and stablecoin volume climbed 14.11%, a combination typically read as both rotation into and staging of capital amid heightened volatility.

Spot fund flows, however, painted a more cautious picture. U.S. spot Bitcoin ETFs recorded net outflows of approximately 968 BTC—about $75 million—over one day. Over the past seven days, net outflows totaled roughly 16,595 BTC, or about $1.29 billion. In other words, even as derivatives-driven rebound pressure surfaced, 'institutional demand' via ETFs did not yet appear to be returning in force.

Ethereum ETFs also logged net outflows: about 2,699 ETH, roughly $5.73 million, on the day, and an estimated 105,862 ETH—around $225 million—over the past week. The persistent leakage across the two largest assets raised questions about how durable any upside move can be without stronger spot sponsorship.

Against that backdrop, flows into Solana-linked ETFs stood out. The segment reportedly saw net inflows of around 72,516 SOL (about $6.24 million) for the day, with roughly 192,835 SOL in net inflows over the past seven days—signaling that capital allocation is becoming more selective rather than broadly risk-on across majors.

On-chain and exchange-flow data also drew trader attention, as several large transfers moved into centralized venues—often interpreted as potential sell-side preparation. An unidentified wallet sent about 54,400 ETH (roughly $115.08 million) to Kraken, while another moved approximately 914 BTC (about $70.98 million) to Coinbase. Exchange inflows do not guarantee selling, but they tend to raise near-term supply concerns, particularly after a liquidation-driven bounce.

Adding to the supply narrative, 2,650 BTC (around $203 million) linked to early-era miner wallets reportedly moved to FalconX and Cumberland, both major institutional trading counterparts. Market watchers said such transfers can make traders more sensitive to any signs of distribution, regardless of whether the coins ultimately hit spot order books.

Some Bitcoin researchers framed the combined pressure as substantial, citing roughly 18,000 BTC of exchange net inflows alongside around 16,000 BTC of ETF net outflows—about 34,000 BTC of potential sell pressure in aggregate. The argument aligns with the day’s tape: the rebound looked more like forced 'short covering' than a fresh wave of spot buying.

Macro and security headlines added further friction. Kenya is reportedly considering a 10% excise tax on virtual asset platforms, while fresh reports of North Korea’s Lazarus-linked targeting of banks and crypto firms, alongside wallet attacks across Ethereum and Base ecosystems that allegedly caused around $3 million in losses, underscored how regulation and security risk can quickly dampen risk appetite.

For now, the market has demonstrated the power of a squeeze when leverage is crowded, but ETF outflows, exchange inflows, and whale-linked transfers suggest the rebound remains on a tight leash—more a test of resilience than proof of a sustained trend change.