$6 Billion in Crypto Shorts Liquidated as Market Sees Massive Rally

The digital asset market witnessed an extraordinary shake-up, with over $6 billion in short positions liquidated in just 24 hours. This sweeping event underlines the volatile nature of cryptocurrency derivatives and the immense impact of sudden price surges. Major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) experienced significant short squeezes, driving the rally higher and forcing bearish positions to unwind at an unprecedented scale.

Historic Liquidation Volume Sparks Interest

On November 2 (KST), Coinglass data revealed that total liquidations in the past 24 hours had reached an astounding $579.78 million. Leading this liquidation frenzy were short positions, which accounted for $450.99 million (KRW 6.315 trillion), making up a staggering 77.8% of the total amount. Conversely, long liquidations came in at a mere $128.79 million (KRW 1.786 trillion), underscoring the market’s shift against bearish bets.

This marked a significant escalation from the previous day, as the overall liquidation scale rose by 32.76%, underscoring the abruptness of the price surge and its impact on short-sellers.

Bitcoin (BTC) Leads the Liquidation Tsunami

Bitcoin emerged as the cryptocurrency with the highest liquidation volume during this rally. In the 24-hour period, BTC liquidations totaled $259 million (KRW 3.629 trillion). Remarkably, $234.69 million (KRW 3.288 trillion)—or 90.7%—of this sum came from liquidated short positions, reflecting the sheer scale of bearish sentiment that unraveled.

Contributing to this massive unwinding of short positions, Bitcoin’s price climbed 3.75% during the day, catching many short positions off guard as traders recalibrated to the bullish momentum.

Ethereum (ETH) Short Squeeze Drives Gains

Ethereum mirrored Bitcoin’s liquidation trend but with its own noteworthy figures. ETH recorded $140.25 million (KRW 1.965 trillion) in liquidations, and short liquidations accounted for $114.16 million (KRW 1.599 trillion), or 81.4% of the total.

The price of ETH surged 4.88% during the same timeframe, inducing a pronounced short squeeze. As bearish bets were systematically liquidated, Ethereum bulls enjoyed a clear upper hand, further propelling its price recovery.

Altcoins Rally as Shorts Unwind

Not to be left out, several altcoins also posted significant liquidation volumes amid the broader market rally. Solana (SOL) recorded $27.94 million (KRW 391 billion) in total liquidations, with short positions contributing $21.70 million (KRW 304 billion), or 77.67% of the total.

Other prominent cryptocurrencies, including XRP and Dogecoin (DOGE), followed suit, with short liquidations consistently dwarfing long liquidations. For instance, DOGE noted $6.84 million (KRW 96 billion) in short liquidations, compared to a starkly smaller $850,000 (KRW 12 billion) in long liquidations—a nearly eightfold difference that highlights the dominance of bearish position shakeouts.

Interestingly, the notoriously volatile token HYPE, which historically leaned toward long liquidation dominance, noted $660,000 (KRW 9 billion) in short liquidations versus $570,000 (KRW 8 billion) in long liquidations, signaling a pivot in its trading dynamics during the rally.

Plasma (XPL) Emerges as an Exception

While most cryptocurrencies basked in a bullish recovery, Plasma (XPL) stood out as the sole outlier in this liquidation wave. Long liquidations for XPL reached $27.43 million, sharply exceeding the $12.15 million attributed to short liquidations. As the broader market rebounded, XPL’s price plunged by 9.24%, showcasing a unique divergence from the overarching market trend.

Surge in Trading Activity Fuels Liquidation Event

The sharp uptick in liquidations was accompanied by a notable surge in trading activity. Data revealed a 26.46% increase in 24-hour trading volumes, which reached $325.7 billion (KRW 452 trillion). Concurrently, Open Interest (OI)—a key metric for tracking leveraged positions—rose 5.87% to $211.8 billion (KRW 294 trillion).

These figures point to elevated leveraged bets among market participants, a dynamic that amplifies the speed and magnitude of liquidation dominoes when price movements stray sharply from expectations.

Investor Sentiment Remains Neutral

Despite the dramatic rally, market sentiment remained cautious. The Fear and Greed Index, a widely followed sentiment gauge, held steady in the "Neutral" zone at 42. Meanwhile, the Relative Strength Index (RSI), a key technical indicator, stood at 48.11, similarly reflecting a balanced sentiment.

This reveals an investor base that, despite the rally-induced short squeezes, remains hesitant to commit to a clear bullish or bearish stance for the medium term. The influx of new positions, however, could inject further short-term volatility into the market, keeping traders attuned to potential swings in either direction.

Conclusion: Market Prepares for Next Chapter

The $6 billion liquidation event underscores the relentless volatility and unpredictability of the cryptocurrency market. As Bitcoin, Ethereum, and other major altcoins rallied sharply, short positions were unwound en masse, reshaping the trading landscape.

However, the cautious investor sentiment coupled with rising Open Interest suggests that the market is bracing for another potential wave of activity. In this high-stakes environment, traders and investors alike must remain vigilant as the digital asset market prepares for its next significant move.