Bitcoin jumped 24.6% over a five‑day period in August, marking its sharpest rally since 2022, as short sellers were forced to unwind positions. On‑chain analytics firm Glassnode and the derivatives exchange Bybit reported that short liquidations accounted for roughly 89% of every liquidated dollar, while overall market leverage fell during the same window.
Short squeezes drive price surge
According to the Glassnode‑Bybit analysis, the wave of short liquidations began as the cryptocurrency broke above the $78,000 mark and accelerated toward the $81,700 resistance level that several exchanges flagged as a key barrier. The data showed a steep decline in active leverage, indicating that traders reduced exposure even as the market rallied, a pattern that amplified the impact of each forced short cover.
Broader market backdrop
The rally unfolded against a backdrop of heightened macroeconomic tension. An emerging oil price shock lifted bond yields, prompting a 6% jump in Bitcoin to around $81,000, according to Bitbo. Higher yields traditionally pressure risk assets, but the concurrent squeeze on short positions appeared to offset that drag, sustaining buying pressure.
"Bitcoin's Sharpest Rally in Two Years Ran Almost Entirely on Short Liquidations," Decrypt reported, citing the Glassnode‑Bybit findings.
Crypto‑focused commentator Arthur Hayes, speaking on the social platform Stocktwits, argued that the market did not need additional legislative clarity but rather a decisive interest‑rate hike to curb speculative excess, suggesting that policy moves could shape the next phase of price action.
The liquidation trend was not confined to Bitcoin. U.Today noted that millions of dollars worth of XRP shorts were also wiped out as the token surged to $1.40, underscoring a broader wave of short‑position unwindings across major digital assets.
Despite the rapid price climb, the decline in overall leverage points to a cautious sentiment among traders. Active leverage fell, meaning fewer participants were holding highly leveraged bets, which could limit the rally's upside if new buying pressure does not materialize.
Looking ahead, analysts caution that Bitcoin faces a critical test at the $81,700 resistance level. A breach could open the path toward the $85,000–$90,000 zone, while a failure to clear the barrier may trigger renewed short‑selling activity, especially if macro pressures from rising yields persist.
Market Snapshot
| Asset | Price | 24h | Market Cap |
|---|---|---|---|
 Bitcoin BTC | $80,990 | -0.18% | $1627.2B |
 Ethereum ETH | $2,624 | -0.37% | $320.5B |
 BNB BNB | $759.3 | -0.55% | $101.2B |
 XRP XRP | $1.42 | +1.20% | $89.3B |
 Solana SOL | $110.69 | -2.23% | $65.1B |
 Dogecoin DOGE | $0.0878 | -0.22% | $13.7B |
 Cardano ADA | $0.227 | +1.40% | $8.5B |
Live data: CoinGecko — 2026-09-19 21:20 UTC
