Bears Squeezed: $789M in Crypto Liquidations as Bitcoin Nears $97K

Bitcoin’s rally is back in motion and positioning blinked first. With spot trading around $96,867—its strongest print since November 14—derivatives shorts were forced to cover, driving a sharp, mechanical bid that punished bears across majors.

By the numbers: over the past 24 hours, crypto liquidations totaled about $789 million, per CoinGlass, with roughly $690 million coming from short positions. Bitcoin accounted for $382 million of the liquidations, Ethereum $231 million, and Solana $33 million. Spot strength was broad: Ethereum rose nearly 7% to $3,354, XRP advanced almost 5% to $2.17, and Solana added close to 4% to about $147. Even after the pop, Bitcoin remains about 23% below its early-October peak above $126,000, but it’s up nearly 5% on the day and just over 5% on the week.

What changed? Two narratives converged with liquidity and leverage:

- Policy traction: The Clarity Act—an emerging U.S. crypto market structure bill—continues to gather momentum, with a Senate Banking Committee markup slated for Thursday. When market structure risk compresses, risk premia tend to follow, and shorts become the funding leg for renewed spot demand. - Macro backdrop: Tuesday’s CPI signaled steadying inflation, and capital rotated back into risk. U.S. Bitcoin ETFs saw $754 million of net inflows on Tuesday, their strongest single day since October. Gold and silver pushing to fresh highs this week reinforced the “own scarce assets” impulse.

The key dynamic is reflexivity between flows and leverage. When ETF creations accelerate and policy headwinds soften, dealers and basis traders hedge by buying spot or futures. That incremental bid lifts price through local liquidity pockets. As price grinds higher, exchanges’ liquidation engines kick in on crowded shorts, forcing market buys that thin the order book and propel further upside. It’s less about new information and more about inventory imbalances resolving at speed. In these windows, perps funding, term basis, and the shape of order books matter more than headlines.

Sentiment is catching up to price. On prediction platform Myriad, traders now assign nearly an 89% probability that Bitcoin touches $100,000 before revisiting $69,000—up almost 13 percentage points in just 24 hours. When probability distributions swing that quickly, it often reflects traders hedging exposure rather than a durable change in conviction. That’s why I watch three prints after a squeeze: ETF net creations, the change in open interest adjusted for price, and the ratio of forced liquidations to total volume. If liquidations dominate and OI shrinks, it suggests a positioning event more than a trend transition.

One more nuance: rallies born from short covers can run further than many expect because they refill liquidity as they go, but they can fade abruptly when the forced buying exhausts. With Bitcoin still well below its October high, the ceiling isn’t predetermined; it’s defined by whether real spot demand—ETFs, treasuries, HNW—steps in behind the squeeze. The next move will be decided not by tweets or takes, but by whether those $754 million ETF inflows repeat and whether policy language in the Clarity Act reduces perceived tail risk. Until then, bears just learned again how expensive patience can be in a reflexive market.