Highlights
- Bitcoin broke above $87,000 in early Tuesday trading, its highest level since January and roughly 16% above the $75,000 low it touched just six days earlier
- Market trackers reported more than $1 billion in crypto liquidations over 24 hours, while The Block separately measured $750 million in liquidations, including $648.3 million in short positions
- On-chain data shows leveraged traders caught on both sides of the move: one wallet was liquidated four times in 14 hours, and whale trader Garrett Jin flipped a long profit into a short before closing it again within hours
- Glassnode flagged the altcoin cycle indicator tipping from Bitcoin dominance toward altcoin season as the rally broadened across the market
Bitcoin tore through $87,000 early Tuesday before easing back, marking its highest level since January and extending a rebound that has now pulled the largest cryptocurrency roughly 16% off the $75,000 low it touched on September 15. Data aggregated by SoSoValue and cited by PANews showed the broader crypto market rising in tandem, with the AI token sector up nearly 10% on the day as Bitcoin briefly changed hands above $87,000 intraday.
The move has been driven in large part by a short squeeze. The Block, tracking exchange data separately, recorded $750 million in liquidations over 24 hours, of which $648.3 million came from short positions and roughly $101.7 million from longs; Bitcoin-specific liquidations alone totaled $360.7 million, with the single largest forced sale an $11.3 million position on Binance. Crypto-tracking account Whale Insider put the wider market figure even higher, reporting more than $1 billion liquidated in the past 24 hours, a number Watcher.Guru corroborated with its own breakdown of roughly $850 million in shorts against $200 million in longs.
On-chain data from Lookonchain shows how violently the rally whipsawed individual traders. A wallet labeled 0xc3ed, which the tracking account had singled out hours earlier as a 100%-win-rate Bitcoin long trader sitting on $9.26 million in profit, reversed into short positions that were liquidated four times within 14 hours, wiping out a combined 375.8 BTC, worth about $32.55 million, as the price kept climbing.
Whale trader Garrett Jin had a similarly turbulent stretch. After closing a Bitcoin long for an $8.38 million profit, Jin flipped into a 3x short on 500 BTC as price topped $85,994, only to close that short again roughly three hours later for a comparatively modest gain of around $80,000, per on-chain trackers, as the rally kept grinding higher toward $87,000 rather than reversing.
Related: Bitcoin Breaks $80,000 as Shorts Get Squeezed, HYPE Leads Altcoin Surge
The rebound follows a rough stretch for Bitcoin, which had traded as low as $75,000 less than a week earlier and remains about 32.5% below its October all-time high near $126,000, a run explored in depth after chart analysts declared Bitcoin's bear market over following a 50-week moving average breakout. The move also comes as Bitcoin has been climbing the global asset rankings, having reclaimed a top-15 asset spot from Tesla as BTC and ETH ETFs pulled in fresh inflows. Ether, XRP and Solana all posted gains alongside Bitcoin, up 5.6%, 7.8% and 7.2% respectively over the same 24-hour window, according to The Block's market data. Glassnode, tracking on-chain rotation patterns, said the altcoin cycle signal had flipped from Bitcoin to altcoin season, noting that an initial rally in August had left altcoins largely flat while Bitcoin moved alone, whereas this latest surge has “ignited the full breadth of the altcoin market.”
A Short Squeeze With Leverage Still Building
Traders and analysts have broadly characterized the move as a classic short squeeze: a fast, leverage-driven rally that punishes bearish positioning rather than a slow accumulation of new buying. The scale of the liquidations, more than $1 billion in some estimates within a single day, points to how much bearish leverage had built up in the derivatives market after Bitcoin's slide to $75,000 earlier in the month invited traders to bet on further downside. The pattern echoes a similar squeeze in privacy coin Zcash, where short sellers were crushed as ZEC's rally topped $1,580, with one trader forced to eat a $10.68 million loss.
The rally has also revived attention on skeptics who called the top too early. Coin Bureau noted that Bitcoin has now surged more than 38% since prominent television personality Jim Cramer said on August 4 that he planned to sell his Bitcoin holdings over concerns about quantum computing risks, when BTC traded around $62,300. With futures open interest continuing to climb alongside price, the same dynamic that fueled Tuesday's squeeze, forced liquidations of leveraged shorts, could just as easily reverse into liquidations of longs if momentum stalls.
