Crowded Bitcoin Shorts Leads To Largest Recorded Squeeze In History

Keshav Verma

3 years ago

3 mins read

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Data shows that on Monday crowded Bitcoin shorts have lead to the largest recorded squeeze in the history of the cryptocurrency.

Bitcoin Records Largest Short Squeeze Ever

As per an Arcane Research report, BTC has recorded the largest squeeze in its history where $750 million worth of shorts have been liquidated.

Here is a chart that shows the data for Bitcoin short liquidations over the past one year:

BTC short squeeze spikes | Source: Arcane Research

As is clear from the above graph, the short squeeze seen on Monday, 26 July, hasn’t been observed in the past year. In fact, it’s the largest ever in the crypto’s history, surpassing the infamous 2017 short squeeze that lead to BTC reaching its then all-time-high.

Before yesterday, BTC had been floating in the low $30ks for quite some while with its price seemingly being on a gradual decline. As a result, high leveraged BTC short positions had been accumulating.

Due to the Amazon rumor that the ecommerce giant would start accepting cryptocurrency payments, BTC had a sudden surge in price that took it from 34.5k to 39.5k.

As this rise was totally unexpected, short sellers hurried to squeeze their shorts in order to cut their loses. And this short squeeze was so large that at least $750 million shorts were liquidated.

An interesting thing is that Binance, the largest crypto exchange by market volume, made a change to their API after the crash in May. With this modification, the API only publishes data for one liquidation for second.

This means that any data coming from Binance would be quite underestimated. Hence why “at least” $750 millon in shorts were liquidated. The real figure is almost definitely much higher than that.

BTC Price

At the time of writing Bitcoin’s price is trading around $37.7k , up 27% in the last 7 days. Over the past month, the crypto has gained 14% in value.

Here is a chart that highlights the trends in the price of the coin over the last one year:

BTC gains a sharp upwards trend | Source: BTCUSD on TradingView

After being stuck in the $30k to $35k range for a while, Bitcoin has finally managed to break through the range bound market.

The crypto momentarily touched the $40k mark, but it fell down quickly to these levels. Amazon came forth and confirmed that the rumor that was behind the surge in the price is false, and that has driven the price to down $37k.

It’s unclear where the coin will head next, but some volatility at last is sure to at least keep the price moving, whether downwards or upwards.

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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