Bitcoin's rebound may just be a blood sacrifice for bears after bursting $1.1 billion overnight
Author: Shenzhao TechFlow
Original title: BTC now has the largest single-day short settlement in history: $1.1 billion of short funds evaporated overnight, but it's too early to call the bulls back
Every escape from death requires empty sacrifice. Bitcoin's intraday volume skyrocketed last night, once approaching the $70,000 mark. While the investment community is full of buoyancy, what you might not know is that last night was the largest single-day short liquidation in crypto history. The network's single-day bears rallied over 1.1 billion US dollars, breaking historical records in a fractured manner.
The $1.1 billion bear was rounded overnight, breaking the record in crypto history
On the evening of August 19, BTC started around $64,000 and rose about 7% in an hour to reach an intraday high of $69,970, just one step away from the 70,000 mark. This is the highest price since early June and the biggest one-day increase since March.
The sharp rise was accompanied by blood washing in the contract market. According to public contract data, the entire network closed out about US$1,345 million in the past 24 hours, involving 105,000 traders, of which short orders were about US$1,191 million, and the long ones were only 153 million. In the most intense hour, the entire network sold out $1,194 million, with bears accounting for 93.5%.
By currency type, Bitcoin contract bears were liquidated by about $662 million in 24 hours, while Ethereum bears were about $366 million. Leveraged positions that bet on falling were uprooted almost at the same time. Several whale positions on Hyperliquid totaling nearly $200 million (large highly leveraged companies) have also been completely liquidated.
The liquidation itself will speed up the market. A strong bearish position means being forced to buy back up. The higher the price, the more explosive the higher the higher the higher the higher the higher the higher the higher the higher the price, forming a self-reinforcing feedback loop.
At the same time, judging from multiple data sources,This is the largest Bitcoin shorting in a single day.
The White House summit was only the trigger; the catalyst came from the bond market
The market attributed the surge to two combined benefits.
One is the message side. On August 19, Trump met with crypto industry executives such as Coinbase, Kraken's parent company Payward, and Blockchain.com at the White House, and the market's optimism about the shift in regulation heats up.
The other one is lower level.
On the same day, the US Treasury Department announced a direct doubling of the liquidity support for long-term treasury bond repurchases, raising the upper limit of a single operation from 2 billion US dollars to at least 4 billion US dollars, effective September 9.
In the crypto community's view, this is a more tangible sign than the summit: macro liquidity is loosening in the direction of risky assets.
The data also confirms institutional buying. U.S. spot Bitcoin ETFs had a net inflow of $297.6 million on Monday and another $189 million on Tuesday; funding rates have risen to a 20-month high. The bulls are crowded, and the bears are even more crowded. Once the price starts, a strong pedal will automatically be relayed.
The last major liquidation by bears dates back to 5.19
Old chives must remember “5.19” in May 2021: China clearly prohibits financial institutions and payment institutions from carrying out virtual currency-related businesses. In the midst of panic, Bitcoin hit from above 40,000 US dollars to around 30,000 US dollars in one day, and the entire network bursts out about 7 billion US dollars in 24 hours, setting a historical record at the time.
The 5.19 collapse liquidated bulls, and about $7.56 billion in long leveraged positions were instantly washed away. However, over the next few days, in the midst of panic, a large number of traders frantically leveraged at the bottom to chase the sky. As a result, there was an extremely violent retaliatory backlash.
According to K33 Research, Coinglass data is about 757 million US dollars in a single dayShort positions were instantly washed away, making it the day with the largest number of BTC perpetual short settlements in a single day in history.
And that record was broken just yesterday.
After the top short companies are liquidated, the market is often polished for a few weeks
If you have to forge ahead, the liquidation of top bears is often a sign that the mid-term phased bottom has been completely consolidated. Positions are cleared after deleveraging, and macro-liquidity is transferred to encryption, and it takes weeks of cold washing and energy in the middle.
Will it be the same this time around?
Bitcoin is currently around $69,200, and the 24-hour increase narrowed to 7.6% (as of the morning of August 20). Sentiment indicators are still hesitating: the fear and greed index is 46, which is still in the fear zone; the probability that Bitcoin will reach 70,000 this month on the Polymarket has jumped to about 70% from before the surge.
Axel Rudolph, IG's chief technical analyst, observes that Bitcoin is moving towards $70,000, which indicates that buyers are regaining confidence, but the key test of this round of gains is whether it can maintain momentum and challenge $75,000.
This moment is moment by moment. History is only responsible for providing the script; it is not responsible for guaranteeing the ending. Never return a cow to the stud.
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