Massive Short Squeeze in ETH, ADA, and DOGE Leads to $800 Million in Liquidations, the Largest Since 2023

Crypto Market Sees $750M in Short Liquidations as Ether and Altcoins Surge

A widespread rally in the cryptocurrency market, led by a 20% surge in ether (ETH), has caused over $750 million in short liquidations in just 24 hours—the largest single-day total since 2023. According to CoinGlass data, more than 84% of these liquidations were from short positions, highlighting the intense reaction as altcoins surged 10% to 20% in a matter of hours starting late Thursday.

Ether, which led the charge, surged 20%, briefly surpassing the $2,000 mark for the first time since March. Meanwhile, Dogecoin (DOGE) and Cardano (ADA) saw gains of more than 10%, while other major altcoins like Solana (SOL), Binance Coin (BNB), and XRP rose at least 7%, spurred by a strong wave of positive sentiment and momentum-driven buying.

Liquidations occur when a trader’s leveraged position is forcibly closed due to insufficient margin, often causing a snowball effect of forced sales. These large-scale liquidations typically indicate extreme market conditions, which could signal a potential turning point. When the short liquidations pile up, the market may be set for a reversal as the excessive bearish sentiment is corrected.

The surge in crypto prices coincided with Bitcoin’s rally past the $100,000 level on Thursday, aided by positive sentiment surrounding a trade deal between the U.S. and the UK.

The liquidation event on Thursday ranks among the most severe in recent months, surpassing the March squeeze that wiped out over $550 million as Bitcoin surged to $93,000. An April rally in ETH and DOGE had already liquidated $500 million in short positions, but this latest rally outpaced both, showing an increase in market risk appetite.

The biggest share of liquidations came from Binance and OKX, which together accounted for more than $500 million. ETH alone saw over $310 million in liquidations, while Bitcoin futures accounted for $375 million.

The short squeeze on ether came after a period of low volatility and waning interest from both institutional investors and retail traders. However, Ethereum’s recent Pectra upgrade may be sparking renewed confidence, with traders positioning themselves for potential gains.