Liquidations of short positions in the cryptocurrency market surged to $322 million in 24 hours, the highest level since Black Friday on October 10, triggering a broad rally in major digital assets.
The data highlighted a dramatic shift in market sentiment as traders betting on prices were caught off guard by the sudden rise.
According to Coinglass data as of 2:00 a.m. UTC on Tuesday, short liquidations accounted for 77.67% of total liquidations, reaching $414.65 million. Approximately 109,672 traders were liquidated during this period. The largest single order occurred on HTX, and a BTC-USDT position worth $91.33 million was forcibly liquidated.
The rally appears to be driven by renewed institutional interest in Bitcoin. SoSoValue data shows that on January 2, the US spot Bitcoin ETF had a net inflow of US$471 million. This marked a sharp reversal from the $348 million in outflows recorded on December 31. This is a sign of a rapid return of institutional interest after the New Year holiday.
Cumulative net inflows into U.S. spot Bitcoin ETFs have now reached $57.08 billion. The total net assets are US$116.95 billion, accounting for 6.53% of the total market value of Bitcoin.
The squeeze exposed a clear divide between institutional and retail positioning. Market data shows that although retail traders have poured into short positions before this, institutional traders hold net long positions, accounting for 76.52%. This difference suggests that savvy investors are expecting further gains. Smaller players remain bearish – a bet that proves costly when prices reverse.
Bitcoin price climbed to around $93,700, recovering from a consolidation phase in late December. Altcoins gained even more. XRP led the way with gains of 10.8%, followed by Ethereum and Solana, which gained 0.8% and 0.5% respectively. On a weekly basis, the gains were even more obvious, with XRP rising 28.8%, Solana rising 11.8%, and Ethereum rising 9.6%.
Twelve-hour liquidation data showed particularly strong activity, with liquidations totaling $345.15 million during the window. Of this, $305.43 million came from short positions, indicating that most of the squeeze occurred in the second half of the 24-hour period.
The pain is unevenly distributed. HTX bore the brunt, with liquidations reaching $108.35 million, of which short positions were as high as 96.05%. This shows that its user base has fallen into a serious downturn. Hyperliquid is favored by more sophisticated traders, and its short ratio is equally unbalanced at 87.1%. This shows that even experienced market participants are stuck in the wrong position.
