Bitcoin’s Price Skyrockets to Over $68,000 as $1 Billion Short Squeeze Occurs.
The price of Bitcoin surged beyond $68,000 late Wednesday as a breakout above heavily populated liquidation zones compelled short sellers to cover their positions, resulting in a rapid price increase of approximately 4% within just one minute.
Summary
- Bitcoin rose from under $65,000 to a peak near $69,500 before stabilizing around $68,500.
- Reportedly, over $1 billion in crypto shorts were liquidated within a single hour.
- The breakout successfully surpassed a 4-hour double-bottom neckline located near $65,400.
- Bitcoin is now facing daily resistance levels between $69,000 and $70,000 following its RSI entering the overbought zone.
Market analyst Daan Crypto Trades stated in an Aug. 19 post on X that Bitcoin went through a “massive squeeze” after surpassing the $67,000 liquidation cluster. He noted that the resulting one-minute candle gained about 4%, which was larger than any complete daily candle recorded in recent weeks.
Bitcoin Price Breaks Through a Two-Month Trading Range
As per data from crypto.news, at the time of writing, Bitcoin (BTC) was priced around $68,500 after having reached an intraday high of approximately $69,500 on Binance. This represented a nearly 6% increase from Wednesday’s opening price of about $64,725.
The surge followed a few weeks of minimal price fluctuations between about $62,000 and $66,000, during which buyers repeatedly struggled to maintain levels above $65,000, prompting traders to build leveraged short positions at the top of that range.
In just minutes, Bitcoin reversed this pattern. Once the price exceeded $67,000, exchanges began liquidating positions that lacked sufficient collateral, forcing short sellers to purchase Bitcoin and exerting additional upward pressure.
The larger cryptocurrency market recorded over $1 billion in short liquidations within an hour as Bitcoin rose above $69,000. The total crypto short liquidations ultimately reached $1.79 billion, indicating that the required buying due to liquidations was a crucial factor in driving the rally.
The three-day CoinGlass heatmap illustrates Bitcoin’s progression through various liquidation bands between $65,000 and $67,500 before hitting the upper cluster near $69,000. Consequently, much of the liquidity that had accumulated above the prior trading range was eliminated during the spike.
Treasury Buybacks and SEC Proposal Enhance Risk Appetite
The squeeze followed a U.S. Treasury announcement stating it would at least double the maximum size of liquidity-support buybacks for longer-term government bonds.
Commencing Sept. 9, the Treasury intends to raise the maximum purchase size for 10- to 30-year securities from $2 billion to at least $4 billion per operation. Following this announcement, long-term Treasury yields decreased, the dollar weakened, and U.S. stocks rose.
Lower bond yields can enhance the appeal of risk assets by diminishing the returns available from government debt, although the Treasury characterized its purchases as a method of improving market liquidity rather than a monetary stimulus initiative.
Bitcoin also benefited from a more favorable U.S. regulatory environment after the Securities and Exchange Commission proposed its new “Regulation Crypto Assets” framework on Aug. 18.
According to the SEC proposal, the framework would establish tailored registration exemptions for specific crypto-related investment contracts. One exemption allows qualified startups to raise up to $5 million over four years, while another enables eligible issuers to raise as much as $75 million within a 12-month period, subject to disclosures and other stipulations.
The proposal has yet to take effect and may change based on public feedback. Nevertheless, its release contributed to expectations that U.S. crypto firms might receive clearer fundraising guidelines.
Bitcoin Breakout Targets the $69,000 Resistance Area
The 4-hour Bitcoin chart displays a double-bottom formation that developed between late July and mid-August. Both lows formed around $62,200, with the neckline situated around $65,400.
Wednesday’s price action broke through that neckline with a substantial single candle, placing Bitcoin approximately $3,000 above the prior resistance point. The measured move from this pattern points towards the $68,500–$69,000 area, which Bitcoin attained during the breakout.
Capital flow also strengthened in tandem with the price. The 4-hour Chaikin Money Flow reading rose to 0.26, suggesting that buying pressure exceeded selling pressure during this rally.
However, short-term conditions have become overstretched. The 4-hour relative strength index achieved 83.49, significantly above the 70 threshold commonly associated with an overbought market. The RSI average hovered around 69, indicating how swiftly the momentum built up.
An overbought RSI does not necessitate an immediate downturn, especially in the context of a short squeeze, but it does increase the risk of profit-taking or a reassessment of the breakout. The long upper wick near $69,500 indicates that sellers already responded above the $69,000 mark.
On the daily chart, Bitcoin reclaimed its 100-day simple moving average around $66,288. The price remained slightly below the 200-day average near $69,031, marking the $69,000–$70,000 range as the next critical point in the recovery process.
A daily close above this zone would strengthen the case for a move toward $72,000. Analyst Ted Pillows identified $74,000 as a more significant weekly level, stating that reclaiming it would lessen the chances of Bitcoin dropping below $55,000.
If the breakout fails to hold, attention may shift back to $67,000, followed by the previous neckline around $65,400. The most significant nearby support cluster on the liquidation heatmap is observed between approximately $64,000 and $65,500.
ETF Demand and Reduced Selling Activity Precede Bitcoin Breakout
Prior to Bitcoin surpassing $65,700 on Wednesday evening, the Bitfinex analyst team indicated to crypto.news that diminishing profit-taking and renewed spot ETF demand had cultivated a more favorable supply situation.
The analysts observed that Bitcoin started to rise while U.S. equities were declining, signaling a shift from the cross-asset pattern witnessed after the Iran-U.S. conflict disrupted correlations in early March. At that time, climbing Treasury yields and energy prices continued to exert pressure on traditional markets while Bitcoin remained below $65,000.
On-chain spending patterns also suggested that sellers had limited capacity to lock in profits. Bitfinex analysts noted that long-term holders who moved coins were experiencing small losses, while short-term holders were selling near their purchase prices.
“Long-term holders are realizing losses, albeit minimal, at the deepest ratios since June, while short-term holders are transacting at break-even and the aggregate profit ratio of every coin moved on-chain has now closed below par for 10 consecutive sessions.”
The ratio between profits realized by long-term and short-term holder spent output profit ratios has been steadily declining since Bitcoin reached its all-time high of $126,110 in October 2025. Distribution by short-term holders continues to surpass selling by long-term holders, a dynamic often associated with the later stages of a bear market.
“The supply available for profitable spending is increasingly limited, which favors bullish price action by lessening selling pressure at the range highs,” the analysts explained.
U.S. spot Bitcoin ETFs contributed to this tightening supply. Bitfinex reported that funds attracted $297.5 million on Aug. 17, marking the largest daily inflow of the month, followed by an additional $189.3 million on Aug. 18. This sequence resulted in the first back-to-back net inflows since Aug. 7.
Bitfinex had highlighted $65,700 as the critical threshold Bitcoin needed to surpass for extending its recovery. The subsequent breakout propelled BTC through this mark and into the short liquidation clusters above $67,000, where forced buying accelerated the ascent toward $69,500.
The analysts associated the diminished selling pressure with a longer process of clearing coins held by investors who had acquired them more than two years prior.
“In December, we indicated that long-term holder selling pressure approaches saturation as the two-year supply overhang diminishes,” Bitfinex stated. “This represents what the terminal phase of that process looks like in the market.”
The breakout supports the analysts’ supply-side evaluation, although maintaining levels above $65,700 is crucial. A drop below this level would suggest that the movement was predominantly driven by forced short covering, while continued ETF inflows and robust spot volume would provide stronger validation of persistent demand.
Zhang’s Broader Outlook Still Cautions Against Chasing
Zhang offered a more cautious perspective on Bitcoin’s long-term outlook, expressing that indications of a bottoming process have yet to confirm a sustainable market bottom.
When Bitget Wallet’s research analyst spoke with crypto.news, Bitcoin was trading between $64,000 and $64,700 after spending several weeks within a $62,000–$66,000 range. She referenced moderate leverage, compressed volatility, and slower selling by long-term holders as factors reducing the likelihood of a rapid price movement in either direction.
“Bitcoin is displaying signs of a bottoming process, but not a confirmed bottom,” Zhang remarked prior to the rally.
“If $60,000–$62,000 support holds, the setup offers asymmetric upside; confirmation of a durable bottom still requires sustained volume and less fear.”
The subsequent surge invalidated immediate expectations that Bitcoin would remain subdued below $66,000, yet it did not resolve Zhang’s broader concern regarding whether the market has truly established a lasting low. The breakout relied in part on forced short covering, while the 4-hour RSI and a rejection near the 200-day average signal potential for a pullback.
Zhang anticipates Bitcoin trading within a broad range of $55,000–$80,000 through the end of the year. Sustaining levels above $65,400 after the initial squeeze would offer stronger evidence that spot buyers, not just liquidations, are supporting the latest recovery.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.