Bitcoin (BTC) had been trapped in a range between $61,500 and $65,000 for six consecutive weeks. Volatility had been treading multi-year lows and traders were prepared for the range to contin
Bitcoin (BTC) had been trapped in a range between $61,500 and $65,000 for six consecutive weeks. Volatility had been treading multi-year lows and traders were prepared for the range to continue.
On Aug. 19, the entire setup collapsed in under an hour, and $1.74 billion in short positions were gone before most of the market had time to react.
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That figure, $1.74 billion in crypto short liquidations over 24 hours, makes Aug. 19, 2026, the second-largest short liquidation event on record, surpassed only by the Oct. 10, 2025 crash, according to CoinGlass.
Short positions represented roughly 92% of all liquidations. Traders who had bet against Bitcoin for six weeks were forced to buy it back at a loss, and that forced buying pushed the price higher, which triggered more liquidations, which pushed the price higher still.
On Aug. 20, Bitcoin surged 10% in 24 hours to surpass the $72,000 price mark.
The first catalyst came from Washington. The U.S. Treasury announced it would at least double its long-dated bond buyback operations, raising the maximum from $2 billion to $4 billion per operation.
The 30-year Treasury yield, which had spiked to 5.337%, its highest since 2007, pulled back sharply. Cheaper long-term money favors assets that pay no yield. Bitcoin was the first beneficiary.
The second catalyst arrived hours later. President Trump met with crypto executives from Coinbase, Payward, and Blockchain.com at the White House. He floated the possibility of the U.S. buying "sizable" amounts of Bitcoin and called for Congress to pass the CLARITY Act before the Sep. 15 deadline.
A short squeeze happens when traders betting on falling prices are forced to buy back their positions as prices rise, that forced buying pushes prices even higher, triggering more buying in a self-reinforcing loop.
Bitcoin's push above $72,000 hit a dense band of short liquidation levels that had accumulated over the six-week consolidation. Once that floor broke, the forced buying became self-reinforcing.
As per the onchain analysis platform CoinGlass, crypto shorts worth more than $3 billion and longs worth more than $305 million got liquidated within the last 24 hours.
Bitcoin with $1.67 billion and Ether with $1 billion led the short squeeze.
The Fear and Greed Index jumped from 41, fear, to 59, greed, in a single session.
Bitcoin is now testing its 200-day simple moving average at $69,031, a level it has not sustained since October 2025 when both the price and the average were above $100,000.
More than 44,300 BTC have been sent to exchanges since the rally began, a sign that some holders are taking profit.
Whether fresh spot demand can replace the forced buying is the question the market is sitting with right now.
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