Bitcoin Rally Sees $700 Million in Bearish Crypto Bets Wiped Out
Bitcoin is finally joining the broader risk-asset rally.
The world’s largest cryptocurrency climbed to a two-month high on Wednesday, breaking out of a tight trading range and catching bearish traders off guard. Bitcoin rose nearly 4% intraday to just under $98,000, marking its strongest move since mid-November. Ether and other major digital assets posted even larger percentage gains.
The sudden upside move triggered a sharp short squeeze across crypto derivatives markets. Data from CoinGlass shows roughly $700 million in short positions were liquidated across digital assets in a 24-hour period, with Bitcoin shorts accounting for a significant share.
Why Bitcoin Is Moving Now
Technically, Bitcoin’s breakout above its 100-day moving average is viewed by traders as a bullish signal. The asset had entered 2026 on a soft note, lagging rallies in equities and precious metals, but had been flashing signs of building pressure beneath the surface throughout January.
From a macro perspective, easing U.S. inflation data has helped revive appetite for alternative assets. Investors are increasingly viewing Bitcoin through a “hard-asset” lens, particularly as debates around central-bank independence, geopolitics, and fiscal discipline intensify.
“Medium term, we could see investors allocate more to Bitcoin on a gold catch-up narrative,” said Justin d’Anethan of Arctic Digital, noting that broader risk-on sentiment has returned across markets.
Short Squeeze Adds Fuel
Beyond fundamentals, positioning played a major role. Roughly $290 million in Bitcoin short positions were liquidated alone, forcing traders to buy back exposure at higher prices. That dynamic helped accelerate the move and push prices toward key psychological levels.
At the same time, institutional interest appears to be returning. U.S.-listed Bitcoin ETFs saw more than $750 million in net inflows in a single session — the strongest day since early October — suggesting renewed conviction among larger investors.
What Traders Are Watching Next
Market participants now see $95,000 as a critical support level. A sustained move above that threshold could open the door to a renewed test of $100,000, with technical resistance sitting higher if momentum continues.
For now, Bitcoin’s breakout reinforces a broader theme emerging in early 2026: investors are rotating back into assets perceived as hedges against monetary instability, geopolitical risk, and long-term currency dilution.
WSA Take
After weeks of dormancy, Bitcoin has reasserted itself as a volatility-driven macro trade. The size of the short squeeze underscores how crowded bearish positioning had become — and why moves higher can unfold quickly once momentum turns.
Read our recent coverage on Precious Metals in 2026.
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Disclaimer
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