Ethereum [ETH] just reminded traders what a short squeeze feels like.
After clawing its way back above $2,670, the sudden rebound wiped out over half a billion dollars in short positions on Binance alone, marking one of the largest liquidations the market has seen in recent times.
And now, with fresh ETH flowing into derivative exchanges, the setup looks primed for more.
Ethereum’s rally above $2,670 caught leveraged short traders off guard, setting off one of the largest liquidation waves in recent months.
CryptoQuant data shows a dramatic $500 million delta in short liquidations on Binance – a clear sign of overcrowded bearish bets.
Expecting further downside, traders aggressively entered short positions. But when ETH reversed direction, margin calls forced rapid buybacks.
These forced liquidations fueled the price rally, squeezing late shorts and swiftly shifting market sentiment.
The chain reaction pushed funding rates into positive territory, highlighting the sharp unwinding of bearish leverage.
