Bitcoin Hits $85,000 as Short Squeeze Triggers $648 Million in Liquidations

Bitcoin climbed to $84,984 during the late European morning, marking a 5.4% gain over 24 hours. The move pushed the asset well past its previous September high of $82,284.

The rally was largely driven by a short squeeze, with $746 million in total liquidations recorded over the last day. Of that total, $647.9 million came from short positions, including $159.9 million in the past hour alone. Bitcoin shorts accounted for $277.5 million of the 24-hour liquidation volume, while ether shorts made up $122.8 million.

Despite the forced closures, market interest remains high. Open interest across the crypto market climbed 7.59% to $156 billion, while 24-hour trading volume jumped 39% to $224 billion. This suggests that traders are actively replacing liquidated positions rather than exiting the market.

Derivatives data shows a shift in sentiment, with the taker long-short volume ratio leaning nearly 53% in favor of bulls. Bitcoin futures open interest has also topped 700,000 BTC for the first time in weeks, signaling increased demand for leverage as the spot price moves higher.

While whale activity on Binance remains mixed, the overall whale derivatives position ratio sits above 2.0, indicating that large accounts are maintaining significant leveraged long exposure. However, some areas of the market are showing signs of overcrowding; annualized perpetual funding rates for some assets have spiked to nearly 60%, which can precede heightened volatility.

Across the broader market, 95 of the 100 CoinDesk 100 constituents are trading higher. Sui emerged as a standout performer, rising 21.4% over 24 hours, while AI-related tokens like FET and TAO also saw gains. Other assets including Dogecoin and Avalanche saw double-digit percentage increases as open interest in those tokens built up alongside the price action.