Bitcoin Short Squeeze Risk Looms as $4.8 Billion in Shorts Accumulate

Bitcoin's potential for a short squeeze has been highlighted as $4.79 billion in short liquidation leverage accumulates above the $75,982 price level, with an additional $2.05 billion of long liquidation exposure below $67,861.

According to blockchain media The Crypto Basic, Bitcoin fell to $75,000 following a U.S. Senate vote that rejected the Clarify Act, which aimed to establish a federal regulatory framework for digital assets but failed to secure 60 votes needed to advance.

The Senate voted 49-50 against moving forward with the bill on Thursday, causing Bitcoin to drop 4.6% and briefly fall below $75,000. The broader crypto market saw approximately $771 million in liquidations, with Coinbase dropping over 8%, Robinhood down nearly 3%, and Bitcoin-focused firm Strats declining 5%.

After the price drop, new short positions increased as $174 million in longs were liquidated against only $37.9 million in shorts. At the $83,575 price level, Binance reported $958,800 in short liquidation exposure, OKX had $287,090, and Bybit showed $3.53 million. However, the critical figure is the total accumulated short liquidation leverage of $4.79 billion between $75,000 and $83,000.

The lower support level shows significantly less exposure, with only $205 million in long liquidations below $67,861. Binance reported $201,000, OKX $146,000, and Bybit $238,000 at the $67,861 level.

Market analysts note that while a rebound could trigger cascading short liquidations, which may boost buying pressure, the liquidation map only indicates potential exposure without guaranteeing a bounce.