Crypto derivatives traders faced one of the largest short squeezes of 2026 on Wednesday August 19, with over $3 billion in leveraged positions liquidated in 24 hours as major cryptocurrencies surged.
As of 7:30 AM UTC, data from CoinGlass showed total liquidations reaching approximately $3.02 billion. From total liquidations, short positions accounted for roughly 92% of the losses, or about $2.77 billion, while long liquidations totaled only around $257 million.
Aggregated market data from CoinGecko shows that Bitcoin led the price action, climbing nearly 8% from lows near $64,100 to briefly approach $69,900, levels last seen in early June, before stabilizing around $69,100 to $69,500. Ethereum posted even stronger gains of 17 to 18%, trading above $2,200, while XRP advanced roughly 10% to around $1.10. Solana also rose more than 10% in the session.
The top gaining cryptocurrency among leading altcoins was Hyperliquid’s HYPE token, which surged 23% after the U.S. President Donald Trump’s remarks on the protocol.
Short Squeeze Fuels Rapid Deleveraging
The cascade unfolded with unusual speed. More than $1 billion in Bitcoin short positions were forcibly closed within roughly one hour, contributing to a full-day total of about $1.45 billion in total BTC liquidations. Ethereum accounted for approximately $1.13 billion, and Solana added $105 million. The single largest liquidation was a $48.8 million Bitcoin position on Hyperliquid.
Such events are described as a classic short squeeze. Crowded bearish bets were caught offside by the sudden upward move, triggering forced buying that amplified the rally.
This also marked the largest wave of short liquidations in CoinGlass records dating back to 2021, surpassing the short-side figure from the October 10, 2025 crash that remains the biggest overall deleveraging event in crypto history at roughly $19 billion.
Policy Optimism and Liquidity Signals Spark Rally
The price surge and subsequent liquidations were catalyzed by a combination of supportive developments. The U.S. Treasury announced an expansion of longer-dated bond buyback operations, effectively doubling the size of certain liquidity-support purchases. Traders interpreted the move as a potential easing of financial conditions that could benefit risk assets.
Simultaneously, President Donald Trump hosted crypto executives from firms including Coinbase and Ripple at the White House. He urged Congress to advance a “fair version” of the Digital Asset Market Clarity Act, adding to optimism around clearer regulatory frameworks. These factors, layered on existing short positioning, produced the sharp reversal.
While the forced covering provided immediate upward momentum, analysts cautioned that the move’s durability depends on whether organic demand follows the technical squeeze. As of Thursday morning Asian trading, Bitcoin held most of its gains near the $69,000 level.
Also Read: MSTR, COIN, CRCL, HOOD Stocks Rally as Treasury Buyback Eases Yields, Bitcoin Holds $68K
