Key Takeaways
- On Sept. 3, bitcoin jumped above $82,000 as $250 million in short positions were wiped out.
- The short squeeze drove broad crypto liquidations to $758 million, spurring a 21% rally in Zcash (ZEC).
- One analyst says BTC open interest stays at $54 billion, with $81,500 key to sustaining momentum.
Bitcoin Spikes After Heavy Short Liquidations
Bitcoin’s sudden spike on Sept. 3 pushed its price above $82,000, shrugging off the bearish sentiment that had emerged after its recent plunge toward $76,000. Although the asset gradually retreated from the multiweek high, it appeared to establish fresh support around $80,500 while encountering resistance just above $81,200. However, a sell-off later saw it briefly tumble to $79,200.
The upward move dealt a heavy blow to traders shorting the cryptocurrency. Market data shows that nearly $250 million in short leveraged positions were wiped out over a 24-hour period. By comparison, only $21.5 million in long positions were liquidated, underscoring the strength of the bullish momentum sweeping across the market.
This imbalance between short and long liquidations extended beyond bitcoin. Ethereum (ETH), which continues to track BTC’s broader trend, saw short positions account for roughly 54% of its $184 million in total liquidations. The pattern was similar for Zcash (ZEC), which surged 21% on Friday to reach a year-to-date high of $1,023.
Coinglass data shows the surging privacy coin ZEC recorded the third-largest daily liquidations at $38 million, trailing only bitcoin and ETH. Over 90% of these were short positions. Other assets with notable liquidation totals included SOL ($26 million), XRP ($23.5 million) and HYPE ($9.7 million).
Overall, crypto-market liquidations climbed to $758 million, with short positions making up $480 million of the total wipeout.
According to a trader’s commentary, the bitcoin price rebound aligned almost perfectly with key levels flagged earlier in the week. BTC dipped to $76,600, held the area and then reclaimed $80,000, but the bounce did not begin with a surge of fresh exchange-traded fund (ETF) inflows. It started with shorts getting caught.
On Sept. 2, bitcoin ETFs saw net inflows of $101 million, a sharp reversal from Tuesday’s $237 million in outflows. Blackrock’s IBIT led with a gain of $115 million, while GBTC continued to bleed, losing $56 million. ETH, SOL and XRP ETF flows were softer, with BTC absorbing most of the renewed allocation.
However, in a post on X, Freeman said the strongest signal came from derivatives. Shorts were squeezed aggressively, contributing to roughly $1.4 billion in liquidations over 24 hours, most of it from the short side. BTC open interest remains elevated at approximately $54 billion, showing leverage did not disappear; it returned quickly.
Meanwhile, despite the strong bounce, bitcoin is now testing the top of the same $76,000–$81,000 range that capped prices last week. While the market has tagged this area again, it still needs to prove it can close above it. If $80,000 holds into Friday, Freeman asserts, then $81,500 becomes the level to break. Nevertheless, if the move fades, Thursday’s rally may have been primarily a short-squeeze reaction to macro news.
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