Bitcoin and Ether rebound as $427 million in short bets liquidated

Bitcoin and Ether rebounded Friday, led by an 8.3% intraday surge in Ether, as over $255 million in bearish Ether bets and $172 million in Bitcoin short positions were liquidated within 24 hours, totaling roughly $500 million in crypto market liquidations. The rapid gains bore hallmarks of a short squeeze, with traders paying to maintain bearish positions into an 8% rally, exacerbating the move. Ether funding rates flipped negative in perpetual futures, signaling shorts were charged while longs collected, with speculative mechanics driving the action rather than new buyer influx. The episode echoes late August's pattern, when a 23% Bitcoin surge triggered record short liquidations after the Treasury Department announced expanded bond buybacks. Despite gains, Bitcoin remains below its 2026 peak of $94,820 and record high of $126,198 from October 2025.