Bitcoin Price Rebound Driven by Record Short Squeeze, Glassnode Says
A massive wave of short liquidations on Aug. 19 was the primary catalyst behind bitcoin’s rapid price rebound, according to blockchain analytics firm Glassnode.
In its latest market report, Glassnode said the event produced the largest single-day volume of short liquidations recorded in its data feed since tracking began in 2019. Short positions represented roughly 85% of all forced position closures across major centralized exchanges.
The liquidation cascade began as bitcoin surged rapidly above key resistance levels, forcing bearish traders to cover leveraged positions. Glassnode’s liquidation heatmaps indicate that an asymmetrical buildup of short leverage had accumulated over as many as 10 days before the breakout.
As bitcoin moved higher, pending stop-loss orders and forced exchange closures created mechanical buying pressure, accelerating the rally toward the $80,000 threshold.
Short Liquidations Fueled Bitcoin’s Four-Day Rally
As previously reported by Bitcoin.com News, a violent short squeeze served as the primary engine behind bitcoin’s gain of more than $12,000 over a four-day period. In some cases, short liquidations exceeded long liquidations by a 4-to-1 margin.
On Aug. 19, approximately $1.74 billion in bearish bets were forcibly unwound, compared with $160 million in long liquidations. Pressure on leveraged sellers continued through Aug. 22, eliminating an additional $1.22 billion in short positions as cascading stop-loss orders helped sustain the upward momentum.
Spot Bitcoin ETFs Helped Sustain the Rally
Although short liquidations triggered the initial price spike, Glassnode said aggressive spot buying provided the additional support needed to maintain higher price levels.
U.S. spot bitcoin exchange-traded funds were among the key market drivers supporting the rally. The funds recorded more than $2.2 billion in net inflows during the week following the squeeze, marking their strongest weekly intake of the year.
Glassnode also reported that every wallet-size cohort, from retail holders to large institutional entities, shifted into strong net accumulation. The move produced the most consistent buying trend observed since late 2024.
Wallet clusters linked to exchanges, custodians and ETF providers added more than 31,500 bitcoin during the rally window.
Bitcoin Faces Resistance Between $83,000 and $86,000
Despite the strong momentum, Glassnode warned that onchain metrics show bitcoin’s upward trajectory now faces a major structural test. Approximately 1.05 million bitcoin held by long-term holders are positioned in an overhead cost-basis shelf between $83,000 and $86,000.
Because these coins were held through extended drawdowns, the price range could reveal whether patient investors decide to sell near breakeven or continue holding for further gains.
On the downside, short-term holder cost bases near $70,000 and the $62,000-to-$65,000 support zone remain critical defense lines for bitcoin bulls.
