Bitcoin Surge Blasts $170M in Bearish Shorts

Short traders betting against higher bitcoin (BTC) prices lost some $90 million on Tuesday alone, adding on to the $70 million in short liquidations on Monday

Bitcoin’s ever-growing prices are leaving at least one group startled by the rapid bumps: Those placing highly leveraged short futures bets aimed at profiting from potential price reversal.
Short traders betting against higher bitcoin (BTC) prices lost some $90 million on Tuesday alone, adding to the $70 million in short liquidations on Monday, according to data source CoinGlass. These may have contributed to the asset’s strength since the start of this week – a move that has seen it jump to $44,000 from $39,000.

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Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).
Large liquidations can signal the local top or bottom of a steep price move, which may allow traders to position themselves accordingly.
Most of these liquidations have occurred on crypto exchanges Binance, OKX and Huobi, data from CoinGlass shows. Trading volumes have surged 25% in the past week, and open interest has grown to $20.2 billion from $17.2 billion at the start of December.