Bitcoin surged above $72,000 on Thursday, extending a move that began around $65,000 a day before. But the speed of the rally came with an important qualification: a large part of the buying was forced. More than $3.1 billion in crypto short positions were liquidated across August 19–20, according to CoinGlass data. Bitcoin accounted for about $1.65 billion of the total. Thursday also produced the largest single-day wipeout of crypto shorts on record.
The question now is whether Bitcoin can hold those gains after the liquidation cascade runs out of fuel. That matters because another group of investors is already moving in the opposite direction. Short-term holders sent 43,300 BTC in profit to exchanges, their largest profit-taking move of 2026.
The short squeeze explains why Bitcoin moved so quickly
The most violent part of Bitcoin's rally came on Wednesday. Data reported by Decrypt showed $1.14 billion in crypto shorts liquidated in a single hour, including $677.64 million in Bitcoin shorts. Bitcoin Magazine separately reported that more than $1.7 billion in Bitcoin short positions had been liquidated over 24 hours, with roughly $1.5 billion occurring in four hours.
$1.14B worth of shorts were liquidated in one hour on Aug 19; over $3B in total over the last 48 hours. Source: Coinglass
Short liquidations create buying pressure because exchanges close losing leveraged positions as prices rise. That buying can push prices even higher, triggering another layer of liquidations.It explains why Bitcoin could move several thousand dollars in a matter of hours. But it is also temporary. Once the vulnerable short positions have been removed, Bitcoin needs ordinary buyers to replace them.
43,300 BTC has already moved to exchanges in profit
That transition is happening while recent Bitcoin buyers have gained an opportunity to exit profitable positions.
According to CryptoQuant data, short-term holders — defined as wallets holding coins for less than 155 days — moved a record 43,300 BTC in profit to exchanges, or $3.1 billion at current rates. It was their largest profit-taking exchange transfer of 2026.
Source: Cointelegraph (data by CryptoQuant)
Sending Bitcoin to an exchange does not mean every coin will immediately be sold. But it puts those coins in a position where they can be sold and therefore increases potential near-term supply. The timing is significant.
Bitcoin's rally pushed the short-term-holder cohort back above its aggregate cost basis, or realized price, of approximately $68,700. That means investors who had been sitting on unrealized losses suddenly had an opportunity to exit near break-even or in profit.
Short-term holders are back in profit
Another CryptoQuant metric supports that interpretation. The short-term holder spent output profit ratio, or STH-SOPR, rose to 1.01, its highest level since April.
A reading above 1 means coins moved by the cohort were, on average, transferred at a higher price than when they previously moved.
Source: CryptoQuant
That creates the central tension for Bitcoin after the squeeze. Short sellers were forced to buy into the rally. Short-term holders are now in a position to sell into it. Whether Bitcoin stays above $70,000 depends on whether fresh demand can absorb that supply.
Spot demand now matters more than liquidation data
There are some signs that the rally has support beyond derivatives. Coinglass data shows that U.S. spot Bitcoin ETFs had recorded a $517 million inflow on August 19 alone.
It’s also worth noting that spot Bitcoin ETFs had turned net positive again after a period of outflows. The next few sessions should therefore be more informative than the initial breakout.
If ETF and spot-market demand remains firm after short liquidations fall back toward normal levels, it would suggest the squeeze triggered a broader change in positioning. If Bitcoin begins falling as liquidation activity disappears, the rally will look more dependent on leverage.
Source: Coinglass
$68,700 is now an important level
Before the rally, short-term holders' aggregate Bitcoin cost basis stood near $68,700. That level now provides a useful test.
Holding above it would mean the average recent Bitcoin buyer remains in profit even after the short squeeze subsides.
Falling below it would put many of those holders underwater again and increase the risk that the move above $70,000 was primarily a temporary liquidation event.
Bitcoin's immediate technical range is also relatively clear. $70,284 to $73,245 has been acting as a resistance zone during Wednesday's rally. At the time, it was expected that a daily close above $70,284 could open the way toward $73,245, while losing $68,000 would put Bitcoin back inside its previous trading range.
Bitcoin has since traded above $72,000, meaning the upper end of that zone is now the next immediate test.
Can Bitcoin hold the rally?
The $3 billion short squeeze was powerful enough to push Bitcoin out of a range that had contained it for much of the summer. But forced buyers cannot sustain the rally indefinitely.
The market now has to absorb 43,300 BTC moved to exchanges in profit, while the short-term-holder SOPR shows that recent investors are once again realizing gains. That makes the next phase relatively easy to judge.
If Bitcoin remains above roughly $68,700–$70,000 while liquidations decline and spot demand stays positive, the breakout has evidence of demand beyond forced short covering.
If BTC falls back through that area once the squeeze ends, the move toward $72,000 will increasingly look like a liquidation-driven overshoot rather than the beginning of a sustained trend.
For now, spot buying, ETF flows and short-term-holder selling matter more than another headline liquidation number. It’s also worth noting that Bitcoin’s move coincides with President Donald Trump’s bullish message to the crypto industry, which might just provide an extra spark for another leg up.
