Bitcoin Breaks Six-Week Range Above $71K as $3B in Shorts Liquidated

• Six weeks of tight trading came to an abrupt end as Bitcoin’s breakout triggered the largest wave of short liquidations since at least 2021, forcing roughly $3 billion in bearish positions to close into limited market liquidity.
• Bitcoin extended Wednesday’s rally, moving above $71,000 for the first time since June. BTC gained about 3.5% since midnight UTC and roughly 11% over 24 hours after decisively breaking out of the range it had traded within since July 8.
• The move was driven largely by market positioning rather than a single fundamental catalyst. Bitcoin had spent nearly six weeks between approximately $62,000 and $66,900, while volatility fell to multi-year lows. The compressed range encouraged traders to repeatedly bet against moves toward the upper boundary.
• As a result, a large concentration of short-liquidation levels built between $65,000 and $67,000. The US Treasury’s announcement that it would at least double long-term bond buybacks to $4 billion pushed the 30-year Treasury yield lower from 5.337%, its highest level since 2007, helping boost demand for risk assets.
• Once Bitcoin cleared the upper end of its range, roughly $3 billion in short positions were forced to close through market buying. The resulting squeeze sent BTC more than 8% higher within an hour.

Trump Comments Add Momentum

• President Donald Trump’s comments came several hours after most of the initial move had already taken place. His support for the Clarity Act, suggestion that the US could purchase substantial amounts of Bitcoin and comments about a potential compliant US pathway for Hyperliquid provided another boost.
• Ether traded around $2,270, just below Wednesday’s three-month peak, after surging 19% in 24 hours. Solana, XRP and Dogecoin also posted double-digit gains.
• Coinbase’s Fear and Greed Index climbed to 59, signaling “greed,” from 41, which represented “fear” previously. Bitcoin’s daily trading volume also jumped 250% to around $59 billion.

Derivatives Market Shows Heavy Short Positioning

• Short liquidations totaled approximately $3 billion over 24 hours, compared with $263.5 million in long liquidations. That marked the biggest short liquidation event in records dating back to at least 2021.
• Bitcoin accounted for around $1.67 billion of the liquidations, while Ether contributed approximately $1.14 billion. More than $1 billion was liquidated within a single hour.
• The aggregated BTC long-to-short account ratio dropped to 0.835 from roughly 1.05 on Tuesday, indicating that more accounts were positioned short ahead of the breakout than long. That imbalance helped turn the technical move into a massive short squeeze.
• Total open interest rose 9.11% to $131.25 billion, according to Coinalyze. Bitcoin open interest increased 7.18% to $23.4 billion, while Ether’s climbed 12.36% to $13.2 billion.
• HYPE recorded the largest increase in open interest, jumping 29%. The increase came after Trump’s comments regarding a potential US pathway for Hyperliquid rather than during Bitcoin’s initial breakout.
• Funding rates remained relatively moderate despite the size of the rally. BTC funding stood at 0.0101%, while ETH was at 0.0103%.
• The relatively subdued funding suggests traders have not yet rebuilt the excessive leverage that often follows a major short squeeze.
• Bitcoin futures basis also narrowed. The Aug. 28 OKX contract carried an annualized basis of 7.68%, while the Sept. 25 Deribit contract stood at 4.71%.
• The structure suggests spot demand is leading the futures market, offering a healthier signal than a rally driven primarily by rising leverage.

Altcoins Join the Rally

• LIT was among the strongest performers, gaining 12.4% since midnight to $2.92 and 26.5% over 24 hours. Its weekly gain reached 22.8%.
• PUMP climbed 9.39% to $0.003285, extending Monday’s advance as 24-hour trading volume increased to $112 million.
• ETHFI added 5.68% to $0.5566 and was up 46.3% over seven days as Ethereum-linked tokens benefited from ETH’s move toward a three-month high.
• HYPE gained 2.4% since midnight to $71.12 and was up 21.9% over 24 hours following Trump’s comments about a potential US regulatory pathway for Hyperliquid.
• WLFI was among the weakest performers, falling 4.66% to $0.0586 and standing out as one of the few tokens to miss the broader rally.
• CoinMarketCap’s Altcoin Season Index dropped to 36 from 44 on Wednesday, while Bitcoin dominance increased to 59.2%, suggesting that capital is concentrating increasingly in the largest cryptocurrencies.

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