In crypto markets, "liquidation" means forced selling - margin calls firing, positions vaporizing. This week, nearly $600 million in leveraged bets were destroyed in less than 12 hours.

Most of that pain hit one group: the traders who bet Bitcoin would fall.

How a Short Squeeze Works

A short squeeze happens when traders betting on lower prices get trapped by rising prices.

Leverage - borrowed money used to make bigger bets - makes the math violent. When Bitcoin surged 5% to $72,700 after the ceasefire, short sellers faced a choice: add more money to cover their position, or get force-closed by the exchange.

Most got force-closed. Roughly $398 million came from short positions being liquidated. That's the most aggressive squeeze since March 4, when Bitcoin rallied on the first round of ceasefire talk.

The Cascade Effect

When hundreds of millions in forced buying hits the market at once, it pushes the price higher. That triggers more liquidations, which causes more forced buying, which pushes the price higher again.

Think of it like a snowball rolling downhill - each liquidation feeds the next one. The total: $595 million wiped out across the full period.

What to Watch

Leverage is a two-way amplifier - it makes wins bigger and losses total. Watch Bitcoin's open interest data. High leverage levels signal that another squeeze, in either direction, could fire quickly.