Crypto market bears are “bloodwashed”! At one point, Ethereum surged more than 8%, and over US$300 million in 24 hours, bears were liquidated
The Zhitong Finance App learned that the cryptocurrency market experienced sharp fluctuations again on Friday, and a new wave of short liquidation became the main force driving the market to soar for a short time. Unlike the massive shorting caused by Bitcoin at the end of August, the market focus now turned to Ethereum, the world's second-largest cryptocurrency. According to the data, over 300 million US dollars of short positions on Ethereum were liquidated in the past 24 hours, driving its intraday surge of 8.3% at one point, the biggest intraday increase in three weeks.
On Friday, against the backdrop of the centralized release of a large number of US economic data and falling oil prices, the global financial market fluctuated sharply, and the prices of most digital assets rose rapidly for a while. Bitcoin's intraday increase was less than 4%, clearly lagging behind Ethereum. Since then, both major cryptocurrencies have retreated somewhat from intraday highs.
The current market is reminiscent of the sharp fluctuations at the end of August. At that time, Bitcoin suddenly soared, triggering the largest wave of short liquidations since relevant statistics were available in 2021. Now, Ethereum has become the center of concentrated liquidation of leveraged funds, breaking the pattern where Bitcoin usually dominates deleveraging in the crypto market.
Coinglass data shows that in the past 24 hours, more than 300 million US dollars of Ethereum short positions were liquidated, and the Bitcoin short liquidation scale during the same period was about 212 million US dollars. The cumulative liquidation scale between the long and short sides of the entire digital asset market reached about US$668 million, which is at a high level since Bitcoin's record short liquidation last month.
Adam McCarthy, head of research at trading firm LO:Tech, said: “This round of gains was partly driven by bearish squeezing.” He pointed out that as Ethereum rose by about 8%, short traders were still paying capital fees to maintain short positions, which further amplified the price increase.
Changes in the perpetual contract market are particularly noteworthy. Perpetual futures are one of the main tools for cryptocurrency traders to establish leveraged positions. Recently, the funding rate for Ethereum perpetual contracts turned negative, which meant that bearish sentiment was concentrated in the market, and shorters needed to pay fees to traders holding positions in the opposite direction to maintain their positions.
When the price of Ethereum suddenly rose rapidly, these leveraged bears were forced to make up and further generated buying, thereby driving the price to continue to rise, forming a typical “rolling out” effect. On Binance alone, around $76 million of Ethereum positions have been liquidated in the past 24 hours. McCarthy said most of this came from short positions that were forced to close.
However, there are still doubts about whether this rapid rise will evolve into a more sustainable market. Market participants pointed out that the recent sudden rise in cryptocurrency prices reflects the impact of speculative capital and leveraged position adjustments rather than a marked improvement in actual demand.
Since the rise in the market in August and the forced deleveraging that followed, many traders have chosen to wait and see due to the lack of a clear new catalyst in the market. This has also caused cryptocurrencies as a whole to enter a stage of range-bound fluctuation, and when market positions are clearly inclined in a certain direction, a small price breakthrough may trigger large-scale forced liquidation and rapidly amplify the short-term market.
Bitget Wallet research analyst Lacie Zhang said that recent range-bound shocks “are more like consolidation after short-term momentum gradually weakens, rather than confirmed structural breakdowns.”
Notably, after Ethereum's intraday surge, the clearing structure also began to change. As prices fell from a high level, the earlier wave of forced liquidations, which were dominated by bears, slowed down, and at one point reversed in the direction of bullish liquidation, further reflecting that the current crypto market is still highly volatile.