Crypto markets have recorded one of their largest liquidation events on record, with around $3.5 billion in leveraged positions reportedly liquidated over a 24-hour period as Bitcoin surged above $72,000.
The sharp move came as Bitcoin broke through the $70,000 mark for the first time since early June, triggering a wave of forced closures among traders who had positioned for prices to fall. Market data reported on 20 August showed more than $3 billion in short positions were liquidated during the broader rally.
The scale of the move varied depending on the data provider and the time window used. Reports citing CoinGlass data put total liquidations at figures ranging from around $3 billion to more than $3.5 billion, with short positions accounting for the vast majority. One report citing CoinAnk data placed the total at about $3.64 billion, including roughly $3.33 billion in short liquidations.
Bitcoin was trading around $72,400 at its intraday peak on Thursday, according to market reports, marking its highest level since June 2. The move extended a rally that had already pushed the asset sharply higher over the previous two sessions.
A liquidation occurs when a trading platform automatically closes a leveraged position after a trader’s losses reduce the available collateral below the required level. When large numbers of short positions are closed during a rapid price rise, the forced buying can add further upward pressure to the market.
The effect was particularly visible during this rally. The Block reported that Bitcoin’s move above $72,000 followed a record $2.75 billion in short liquidations on the previous day, while analysts said the rally was also being supported by spot and exchange-traded fund demand.
The wider market also recorded a sharp increase in total value. Figures circulating with the market update put the increase in overall crypto market capitalisation at around $280 billion over 24 hours. Other market reports recorded a smaller increase, illustrating how the figure can vary according to the assets and calculation period included.
Bitcoin’s rise was accompanied by strong gains across other major digital assets. Ethereum also moved sharply higher during the rally, while several other large-cap assets recorded double-digit gains in parts of the 24-hour period.
The move has been linked to several factors rather than a single development. Market coverage pointed to changes in US Treasury bond-buyback plans, renewed institutional demand, improving regulatory expectations and comments from US President Donald Trump following a meeting with cryptocurrency industry executives.
The Treasury announcement was particularly closely watched by markets. Reports said plans to increase long-term Treasury buybacks helped push longer-term yields lower, while a weaker US dollar and changing expectations around liquidity supported demand for risk assets.
Despite the sharp rise, analysts have cautioned against treating the liquidation event alone as evidence of a lasting market trend. The forced closing of short positions can accelerate a rally, but the market needs sustained demand after the leverage has been cleared for gains to hold.
The Block reported that analysts were watching whether Bitcoin could remain above $70,000, with spot demand and ETF flows among the factors that could determine whether the latest rally extends beyond the short squeeze.
For traders using leverage, the episode also highlights the risks created by rapid price movements. Large liquidation events can produce substantial gains for some market participants while forcing heavily leveraged traders out of their positions, often within minutes.
With Bitcoin trading around the $72,000 level following the surge, attention is now turning to whether the market can maintain its gains once the immediate liquidation-driven buying pressure fades.
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