Crypto Rally Liquidates $1.31B in Shorts as BTC Breaks $68,000

Crypto prices surged Wednesday, with Bitcoin crossing $68,000 and Ethereum reclaiming $2,000, as a short squeeze wiped out over $1.3 billion in bearish positions within an hour.

Bitcoin climbed to $68,418, an 8% gain from the previous day, according to Binance market data. Ethereum rose 8.4% to $2,081. Solana, XRP, BNB, Hyperliquid and Dogecoin also posted strong gains. TRON bucked the trend, slipping 0.19% to $0.3334.

CoinGlass data showed roughly $1.57 billion in total daily liquidations, with $1.41 billion of those being short positions. Around 114,038 traders were liquidated. Bitget recorded the largest single order – a $32.18 million ETHUSDT perpetual contract.

The catalyst for the move was a combination of policy and liquidity signals. Treasury Secretary Scott Bessent doubled planned bond buybacks, easing liquidity concerns in the U.S. government debt market. The 30-year Treasury yield fell back from a 19-year high of 5.187%, buoying risk appetite across assets. Gold rose 3.08%, adding $934 billion in market cap, and silver gained 3.86%, a fact noted by market commentator Bull Theory on social media.

Political developments also played a role. A private White House meeting between President Donald Trump, regulators and cryptocurrency executives covered the Clarity Act and tokenization. The industry representatives included SEC Chairman Paul Atkins, CFTC Chairman Mike Selig, and leaders from Nasdaq, NYSE, CME Group and DTCC. The involvement of major exchange and clearing infrastructure signaled growing institutional interest in blockchain-based markets, participants said.

Spot Bitcoin ETFs attracted $189 million in net inflows on August 18, SoSoValue data showed. Spot Ethereum ETFs pulled in $71.5 million, with BlackRock’s ETHA contributing $64.7 million. Those inflows suggested institutional appetite was already strong before the rally. Separately, Hashdex’s DEFI spot Bitcoin ETF began liquidation due to assets under management, trading liquidity, and operating costs; it ceased trading on NYSE Arca that day.

Ethereum open interest jumped from $11.7 billion to $13 billion before settling near $12.5 billion, according to CoinGlass. That pattern points to traders piling on leveraged long positions ahead of the short covering, which then amplified the squeeze, one trader said.

Coinbase shares rose 11% on the sentiment boost, and gains spread across mining and trading firms.

What could disrupt the rally? The surge was partly driven by forced covering, not new long positioning. If the Treasury buyback program proves short-lived or the Clarity Act stalls in Congress, risk appetite could fade quickly. The 30-year yield remains elevated relative to pre-crisis levels, and any renewed spike in long-term rates would pressure speculative assets. On the flip side, continued ETF inflows and regulatory clarity could sustain upward momentum, traders said.

CME Group, which participated in the White House meeting, has an Alpha Score of 58 out of 100 on AlphaScala, reflecting a Moderate outlook. The derivatives exchange stands to benefit from increased volatility and institutional hedging demand.

The next near-term catalyst is the August 21 release of Fed meeting minutes, which could offer clues on how policymakers view the liquidity environment and market stability.