Bitcoin punched through $79,000 late Monday and Ethereum followed it back above $2,600, as a fast-moving wave of short-position liquidations tore through crypto derivatives desks in the span of roughly an hour.
Highlights
- Bitcoin crossed $79,000, up sharply from the roughly $76,800 level it held a day earlier
- Ethereum reclaimed $2,600, a 3.68% intraday gain according to OKX pricing
- Around $100 million in short positions were liquidated across crypto markets in a 30-to-60-minute window
- The squeeze extends a pattern that has repeatedly punctuated crypto's rally since August
The move began building in the New York evening session, with both assets climbing in tandem rather than one dragging the other. Bitcoin's break above $79,000 marked its firmest footing above that level since a bout of volatility knocked it toward the high $70s earlier in the month, while Ethereum's push through $2,600 pulled the token back to levels it hadn't traded at in roughly a week.
Data tracked by Whale Insider showed roughly $100 million in short positions wiped out within a 30-minute stretch as the rally accelerated, a pattern consistent with a short squeeze rather than a broad shift in spot demand. Forced buying from liquidated shorts tends to add fuel to a move already underway, and the speed of Monday's climb — both assets breaking key round-number levels within minutes of each other — points to leveraged positioning getting cleared out rather than a slow grind higher.
It's a familiar script for this market. Crypto has now seen several squeeze-driven legs higher since a $4 billion liquidation cascade in mid-to-late August cleared out a large chunk of short interest and helped carry Bitcoin from the high $60s into the $70s. Each subsequent leg has tended to be smaller in absolute liquidation size — Monday's roughly $100 million print is a fraction of August's peak days — but the mechanics look similar: crowded short positioning, a catalyst or simply enough spot buying to trip stop levels, and a cascade that does the rest.
The backdrop matters here too. Spot Bitcoin ETFs have been bleeding outflows over the past several sessions even as Ether funds pulled in fresh money, a split that had left traders debating whether institutional demand was rotating rather than retreating. A rally built on derivatives positioning rather than ETF creations doesn't resolve that debate, but it does suggest retail and leveraged trading desks are still willing to lean into upside momentum even while ETF flows tell a more mixed story.
Related: Markets Rally as Rate-Hike Bets Ease, Bitcoin Reclaims $80,000
Leverage in the system remains a live risk in either direction. Traders running large leveraged long positions across both BTC and ETH have posted outsized gains on recent legs higher, and Monday's move likely padded some of those books further — but the same leverage that magnifies gains on the way up can just as quickly reverse into forced selling if momentum stalls. With roughly $100 million cleared out Monday against liquidation events earlier this month that topped $190 million in a single session, the market's ability to absorb a much larger squeeze — in either direction — hasn't really been tested since August.
For now, the path of least resistance looks higher: both majors are trading above levels that had capped rallies earlier in the month, and short interest looks freshly thinned out rather than rebuilt. Whether the move has legs likely depends on what happens at the next round-number resistance — $80,000 for Bitcoin, an area it briefly held before slipping back, and $2,700 for Ethereum — and on whether spot demand, not just liquidations, shows up to confirm it.
The timing also puts this squeeze right in front of a Federal Reserve decision later this week, a backdrop that has already pushed several major banks to shift their rate-hike odds in recent days. Crypto has tended to trade on both sides of Fed-week volatility this year — sharp pre-decision repositioning followed by an equally sharp reaction once the statement lands — so Monday's liquidation-driven bounce may say less about where Bitcoin and Ethereum settle by the weekend than it does about how thin positioning had become heading into a week most traders were already bracing for.
