Bitcoin surged through resistance to cross the $118,000 threshold on Friday, triggering a massive wave of derivative market liquidations. According to trackers, more than $1.13 billion in short positions were liquidated in a single day—leaving approximately 237,000 traders caught short in one of the most dramatic flips in recent memory.
This explosive move underscored two key market dynamics: the unrelenting potency of short squeezes in the leveraged crypto space, and Bitcoin’s sustained upward momentum in the face of growing institutional capital and a more favorable macroenvironment.
Bitcoin had been trading in the $112,000–$115,000 range for much of last week. Strong inflows into Bitcoin spot ETFs, combined with easing macroeconomic headlines, supported a move toward $118,000. But the sudden run and the squeeze was primarily driven by the cascading liquidation of large, leveraged short bets once that threshold was breached .
Short liquidations accelerate price moves when concentrated short exposure is rapidly forced to exit as price climbs. CoinGlass metrics reveal that in the hours following the breakout upwards, over $300 million in short positions were violently closed, with more modest long position liquidations—underscoring bearish positioning trapped in bullish territory.
Roughly 237,000 traders saw their positions liquidated, making this one of the biggest single-day events in crypto derivatives history. Among those affected were a handful of deep-pocketed accounts; some reports indicate individual positions worth tens of millions of dollars went up in smoke .
The liquidation clampdown not only overrode bearish positioning—it also ramped up Bitcoin’s rally in a self-reinforcing upward spiral. With shorts accelerating into forced buybacks, BTC extended well above $118,000 before cooling off in subsequent sessions.
Several factors combined to spark Friday’s breakout:
- ETF inflows continue pushing BTC higher, with institutional capital forming a steady backdrop.
- Macro optimism from declining U.S. inflation and balanced rate expectations created a favorable environment for risk assets.
- Technical breakout: The price break above $118,000 completed a short-held upper resistance range.
- Leverage squeeze: High short positioning created a knock-on effect, igniting bullish acceleration once triggered.
This combination turned a technical breakout into a full-blown market event—punctuated by the largest single-day liquidation wave in recent months.
Friday’s price action highlights the volatility that still defines Bitcoin’s derivative markets. Large-scale leveraged positions can trigger cascades that amplify momentum—both up and down.
For holders and long-biased traders, Friday’s event reinforces the narrative that bullish catalysts now far outweigh bearish setups. Rising Bitcoin ETF volumes, corporate treasury purchases, and renewed spot demand suggest fresh tailwinds remain intact.
For short-sellers, the risks are stark: even well-positioned trades can unravel in a rapid squeeze if key resistance zones are breached. Friday’s wipeout serves as a stark reminder of Bitcoin’s capacity for sudden, aggressive moves.
- Squeeze unwind – With compressed overnight action, a further squeeze or reversion could occur if BTC fails to hold post-breakout.
- Funding dynamics – Funding rate spikes will indicate whether long skew is sustainable or overextended.
- Institutional flow follow-through – Continued ETF inflows, corporate treasury demand, or announcements could validate sustained upside.
- Macro headlines – Fresh data on inflation, earnings, or geopolitics will test whether market gains resist external shocks.
Bitcoin’s rapid advance past $118,000, accompanied by $1.13 billion+ in short liquidations and the wiping out of roughly 237,000 traders, showcases how modern crypto markets—rich in leverage and interdependence—can spark sudden and dramatic moves.
This event didn’t just push Bitcoin to new highs—it reaffirmed the force of a leveraged squeeze in amplifying breakout momentum. But it also raises questions about sustainability: will this be a sustained bullish thrust, or a capped rally before a cooldown?
As the rumored “Altseason” brews and institutional flows continue flowing, traders and analysts alike will remain vigilant. Whether Bitcoin stabilizes above $118,000 or reverts toward its recent range, Friday’s liquidation blitz has reshaped the near-term trading landscape.