Bitcoin's sharpest rally in years unwound just as fast this week. BTC's near-30% five-day run pushed it to $79,500 — its most overbought reading since November 2024 — before a sharp reversal dragged price back to $77,000, wiping out $477 million in long positions within an hour and $547 million in total crypto liquidations, according to trading data shared by Coin Bureau.
The move capped what several trading accounts described as the largest short-liquidation streak in crypto history: shorts lost roughly $3.787 billion over four days while longs lost just $687 million, a lopsided ratio that shows the rally was driven overwhelmingly by traders being forced out of bearish bets rather than fresh spot demand. The single worst window came late in the evening of August 20, when a concentrated wave of forced buying briefly overwhelmed order books on major exchanges.
Sentiment Flipped Faster Than the Price
The scale of the squeeze changed how traders are pricing the rest of the year. The probability of Bitcoin closing above $90,000 by December surged from 12% to 48% in just three days, based on prediction-market pricing tracked by The Kobeissi Letter, alongside what was described as the seventh-largest 24-hour liquidation event in crypto's history. Pantera Capital's Cosmo Jiang captured the mood shift, telling CNBC that positioning was "starting to reverse" after ten months of compression and that "there's smart money now coming in, and there's real fundamentals to support the rebound in prices."
Related: Bitcoin's Thin Supply Above $78K Opens Path to $84,569 Target
Even Cramer Flipped
The sentiment reversal reached mainstream financial television, too. Weeks after telling viewers he planned to sell his Bitcoin over quantum-computing concerns raised by IBM's Arvind Krishna, CNBC's Jim Cramer reversed course on-air and told a caller to buy Bitcoin outright rather than mining stocks or derivatives — a whiplash that traders online have taken to calling further confirmation of his reputation as a reliable contrarian indicator.
A Squeeze, Not Necessarily a Trend
The mechanics behind the rally are the same ones now driving its retracement: a market this leveraged in one direction tends to snap back hard once the forced buying or selling exhausts itself. With $3.6 billion more in Bitcoin shorts sitting exposed above the $80,000 level, according to trading desks, the next test of that resistance could trigger another round of the same dynamic that just played out — in either direction.
