A sudden price recovery saw Bitcoin (BTC) climb back to $106,000, setting off a cascade of liquidations across the cryptocurrency market totaling over $341 million in a single 24-hour period. The rapid upward momentum caught many traders by surprise, particularly those betting on a continued price decline.

Short Sellers Hit Hardest by Price Reversal

The vast majority of the losses were absorbed by traders holding short positions. Of the $115.98 million in Bitcoin liquidations, a staggering $106.75 million came from short sellers. In contrast, long traders, who profit from price increases, lost only $9.22 million. This sharp squeeze suggests the market was heavily skewed toward a bearish outlook just before the price surge, a sentiment echoed by comments from Shanaka Anslem Perera in the journal Science, who noted that Bitcoin’s bullish trend was likely not over.

Ethereum (ETH) experienced a similar dynamic, with total liquidations reaching $92.01 million. Once again, short positions accounted for the bulk of the losses at $76.02 million, compared to just $15.99 million for long positions.

Widespread Impact on Altcoins

The volatility wasn’t confined to the top two cryptocurrencies. Other major assets, including Dogecoin (DOGE), Litecoin (LTC), and XRP, also saw significant liquidations. While the figures for these altcoins were smaller, the event highlights how quickly sentiment can shift across the entire digital asset landscape, leading to widespread financial consequences for unprepared traders.

Broader Market Shows Signs of Strength

Despite the forced liquidations, the overall market showed strong signs of recovery. The total cryptocurrency market capitalization grew by approximately $170 billion, reaching $3.56 trillion—a gain of nearly 4% in 24 hours. This renewed confidence appears linked to positive developments outside the crypto space.

Two key events may have contributed to the bullish sentiment. First, the U.S. Senate passed a funding bill, ending a period of government uncertainty. Second, the Depository Trust & Clearing Corporation (DTCC) added several proposed XRP spot ETFs to its pre-launch list, signaling growing institutional interest in crypto products.

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