Crypto Traders Get Wiped Out After Market’s Biggest Rally Since March

Bitcoin’s short squeeze drove the price toward $72,000, but conflicting on-chain indicators and ongoing legislative uncertainty mean the rally has yet to be confirmed.
Bitcoin was trading around $77,500 on Aug. 21, 2026, after climbing nearly 8% the previous day to roughly $78,000 and breaking out of a consolidation range that had lasted for months. It marked Bitcoin’s biggest one-day advance since March. Data from The Kobeissi Letter cited in the report showed total crypto liquidations reached $3.5 billion, including more than $3 billion in short positions.
The rebound was driven by a mix of regulatory optimism, macro liquidity measures and the unwinding of leveraged short bets, according to the report. As Bitcoin moved higher, forced short covering added further buying pressure and accelerated the rally.

Crypto liquidations totaled $3.50 billion over the previous 24 hours, with short liquidations making up more than $3 billion of the losses.
Bitcoin accounted for roughly $1.76 billion in liquidations, while Ethereum contributed about $1.16 billion. Ether surged nearly 20% during the session and was trading above $2,200 at the time of writing.
Crypto-linked stocks also rallied. Strategy gained nearly 12%, while Coinbase, Circle and BitMine each advanced close to 10%.
The report pointed to two key catalysts behind the market’s rebound. The U.S. Treasury said it would raise the maximum size of individual liquidity-support repurchase operations involving 10- to 30-year Treasury bonds from $2 billion to $4 billion, with the increase running from Sept. 9 through Nov. 4.
Standard Chartered’s Kendrick described the move as the kind of government-backed liquidity injection that has historically benefited Bitcoin.
Meanwhile, Trump held a White House meeting with U.S. regulators and executives from the crypto and fintech industries. Participants included SEC Chairman Paul Atkins, CFTC Chairman Michael Selig and representatives from companies and infrastructure providers such as Coinbase and Ripple.
Trump said the government was no longer at odds with the crypto industry and raised the possibility of building holdings of Bitcoin and other digital assets, though he provided no details on how such purchases would be carried out, funded or timed.

Analysts said a realized profit-and-loss ratio above 2, combined with a positive Coinbase Premium Index, could signal conditions for a more sustained trend reversal. Bitcoin’s $68,500 short-term holder cost basis remains an important level to watch.
Legislative risks remain a potential headwind. Polymarket data showed the odds of the CLARITY Act passing this year increased from 20% to 28% following Trump’s comments.
Senate Majority Leader Thune filed a cloture motion for a Sept. 15 vote. The vote would decide whether the Senate can move into formal debate and requires at least 60 votes, rather than representing a final vote on the legislation.