Crypto markets added roughly $280 billion in total value over 24 hours as a $3.5 billion short squeeze tore through leveraged positions on August 20 and 21. More than 190,000 traders were liquidated, the vast majority of them holding short positions, as bitcoin broke decisively above the $65,000 resistance level it had struggled with for weeks to trade as high as $75,311.32 — an 8.5% gain on the day. Total crypto market capitalization climbed to $2.633 trillion, with bitcoin’s share of that figure holding at 59.67% across 18,609 active tokens.
The scale of the squeeze was enough to rank as the seventh-largest liquidation event on record by some measures, and sentiment moved just as fast: the Crypto Fear and Greed Index jumped to 72 from 46 in a single day, flipping from a neutral reading to one bordering on greed.
The immediate catalyst traces back to Washington. The U.S. Treasury announced it would at least double the size of its liquidity-support buyback operations for longer-dated debt, raising the cap from $2 billion to at least $4 billion per operation. The move came as the 30-year Treasury yield touched 5.337%, its highest level since 2008, and as the U.S. dollar index sank to a three-month low — a combination that pushed investors toward hard assets, bitcoin included.
Comparing This Squeeze to Past Records
Separate tracking puts the scale of this week’s unwind in context: short liquidations across the crypto market reportedly reached $3.1 billion over August 19 and 20 alone, with bitcoin perpetual futures absorbing close to $1.1 billion in short liquidations in a single session — the first day on record that figure has topped $1 billion for BTC specifically. That eclipses prior short-liquidation records of $757 million set in May 2021 and $694 million in November 2025, though it still trails the $2.47 billion wiped out during the October 10, 2025 crash. Liquidation totals vary by tracking venue and methodology, so exact rankings differ across sources, but the direction is consistent: this was one of the largest short unwinds crypto markets have seen.
Related: Bitcoin, Ethereum, Hyperliquid Surge Into Overbought Territory on Treasury News
Policy Tailwinds Add Fuel
The rally also followed an August 19 White House meeting between crypto industry executives and regulators, after which President Trump urged Congress to pass a “fair version” of the CLARITY Act. Coinbase CEO Brian Armstrong said he expects a bull run could begin as soon as October if the legislation clears Congress “with a strong bipartisan vote,” tying the market’s near-term trajectory directly to Washington’s legislative calendar.
The speed of the unwind — heavily short traders caught on the wrong side of a Treasury-driven macro shift — fits a pattern that has played out repeatedly this year, where overcrowded positioning rather than a change in fundamentals amplifies short-term price swings. Macro strategist Lyn Alden has argued that this kind of “fast money” washing out of the market can ultimately make room for steadier, longer-term buyers, even if it produces the kind of violent squeeze traders saw this week.
Whether this rally holds or fades once leveraged positioning resets will likely hinge on how markets digest the next round of Treasury operations and any progress on crypto legislation in Washington.
