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Bitcoin rallies 23% weekly after record short squeeze

Analysts cited $1.37 billion of shorts liquidated Aug. 19 and net inflows of 31,740 BTC into bitcoin ETFs, as a macro catalyst also drew attention.

Reported · Written up by our desk · Market Structure

Bitcoin surged 23% over the past week, powered by what analysts described as its largest daily short squeeze on record, alongside a broader rebound in activity across crypto markets, according to The Block. K33 Head of Research Vetle Lunde said the move triggered a leverage reset, with options positioning and technical signals resembling patterns seen in prior bear-market breakouts. Spot and perpetual futures volumes increased 188%, while CME volumes rose 152%, and the annualized bitcoin futures basis climbed to 11.1%, the highest level since January 2025.

The squeeze stemmed from forced buying, The Block reported, pointing to a record $1.37 billion in bitcoin shorts liquidated on Aug. 19, nearly double the prior daily high of $757 million set in July 2021. Another $739 million of shorts were liquidated on Aug. 21, with notional perpetual futures open interest falling to 284,000 BTC, its lowest level since May, and funding rates returning to neutral.

Bitwise CIO Matt Hougan said U.S. Treasury Secretary Scott Bessent’s recent actions provided an additional macro catalyst, including bitcoin’s correlation with gold reaching its highest level since October 2020. The report also noted bitcoin exchange-traded products recorded net inflows of 31,740 BTC in the week, their strongest stretch since the October 2025 highs.

Latest closeGold $4,432.00 ▲1.6%|Bitcoin $78,412.16 ▼0.2%

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