Big moves hit the crypto market right after the latest Consumer Price Index (CPI) numbers dropped. Inflation cooled off more than traders expected, and that lit a fire under risk assets. Anyone who bet against crypto—especially with big leverage—got caught flat-footed.
First, the bullish CPI data sent Bitcoin, Ethereum, and most major altcoins surging. A lot of traders had shorted the market, thinking prices would drop. But as prices shot up, these shorts scrambled to buy back their positions so they wouldn’t get liquidated. That scramble just added more fuel to the rally.
The numbers are wild. In just 24 hours after the CPI report, total crypto liquidations hit about $684 million. Most of that came from short sellers who were forced out as prices ripped higher. Bitcoin shorts alone saw $270 million wiped out. Altcoins like Dogecoin, Cardano, and Binance Coin weren’t spared. Short sellers on those tokens also got crushed.
XRP’s derivatives market was an especially harsh story. Short liquidations outpaced longs by more than ten to one right after the CPI surprise. Clearly, a lot of traders were leaning hard into bearish bets, and the sudden move up flipped the script in a hurry.
This isn’t the first time we’ve seen a liquidation cascade shake things up. In March 2025, during another big macro event, more than $155 million worth of shorts got liquidated in crypto futures—over 90% of that volume was short-side. Perpetual markets recorded another $295 million in liquidations during a similar squeeze, mostly from shorts.
All that forced short covering triggered a classic short squeeze. As bearish traders scrambled to close out, their buying just pushed prices even higher. Bitcoin jumped right through resistance levels, shooting above $95,000. Other tokens followed suit. For a moment, the mood shifted—bearish sentiment eased, and derivatives traders got a bit more cautious about betting against the trend.
But let’s be real: short liquidations alone don’t guarantee a lasting bull run. These price spikes reflect panic and forced trades, not a flood of new buyers. If you’re looking for a true trend shift, keep an eye on bigger drivers—like institutional money, real spot demand, and the next round of macro data. Liquidation wipeouts can mark a turning point for trader positioning, but if the follow-through isn’t there, the rally fizzles fast.
Want a breakdown of how these dynamics play out in stocks or FX markets? Just say the word.
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