Bitcoin Short Squeeze Reaches US$1.23 Billion, Why Did BTC Price Suddenly Rise?

One hour was enough to wipe out US$1.23 billion in short positions on the Hyperliquid platform. This Bitcoin short squeeze occurred on August 19, 2026, when BTC price surged 2.5% in minutes and touched the US$68,424 level, after having been stuck around the US$64,000 range throughout the day.

According to CoinGlass data, total liquidations within that one-hour window reached US$1.31 billion, with nearly all coming from traders who had opened short positions — betting that prices would fall. Bitcoin accounted for the largest chunk, around US$770 million, while Ethereum added another US$430 million, rising 3.9% to US$2,084.

What makes this event even more noteworthy: three whale wallets on Hyperliquid were also crushed, with combined losses of US$194 million, one of which lost its entire 1,800 BTC short position in a single blow. Bloomberg even called this moment the largest Bitcoin short liquidation wave on record since 2021.

Read Also: Bitcoin Price History from 2009–2026: From Zero to Hundreds of Thousands of Dollars

The Minutes of the US$1.23 Billion Short Liquidation

This sudden rally was no accident. As soon as BTC price broke through certain levels, thousands of leveraged short positions were automatically force‑liquidated by exchange systems. Each liquidation forced the exchange to buy BTC on the market to cover the traders' margin defaults, and those forced purchases pushed the price even higher.

The effect was chain‑reaction. The price increase from the first wave of liquidations immediately hit the next cluster of liquidations, and so on in a self‑reinforcing cycle. This phenomenon explains why BTC can move across such a large price range in just 60 minutes.

Over the broader 24‑hour period, the numbers are even larger. BeInCrypto recorded total liquidations of US$1.57 billion from 114,038 traders, with shorts accounting for as much as US$1.41 billion. The largest single order was an ETH position on Bitget worth US$32.18 million. 

Meanwhile, CryptoTimes reported a slightly different aggregate of around US$1.91 billion for the same period — such discrepancies are normal because each data platform uses different snapshot timings and node sources.

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Three Hyperliquid Whales Crushed by the Rally

The biggest loss fell on the wallet with address 0x8c96, which lost its entire short position of 1,800 BTC worth approximately US$117 million. On‑chain data from Hypurrscan confirmed a full liquidation of this wallet.

Two other wallets met a similar fate. Wallet 0x431f was fully liquidated with 677 BTC (about US$44 million), while account 0x004e lost 500 BTC worth roughly US$33 million. On‑chain analyst Lookonchain was the first to uncover these findings via an X post, complete with details for each wallet.

The total losses of these three whales reached US$194 million in just one hour — a sum large enough to shake the sentiment of other short traders still holding positions in the market.

Read Also: Bitcoin Is a "Deep Freeze", What Does It Mean According to Michael Saylor?

Why Could Bitcoin Price Jump So Fast?

The initial trigger came from Washington, not from the crypto market itself. BTC price began to rise after a successful buyback of long‑term US debt lowered Treasury yields from their highest levels in 19 years. Falling Treasury yields typically make risk‑on assets like Bitcoin more attractive to investors again.

Timing was also crucial. The Federal Open Market Committee (FOMC) had scheduled the release of the July meeting minutes for 14:00 ET, just a few hours after this wave of liquidations occurred. 

Read Also: 10 Legit Free Bitcoin Mining and Faucet Sites in 2026

In that meeting, the benchmark interest rate was kept in the 3.50–3.75% range, although three regional Fed presidents dissented and favoured a rate hike. According to a Newsquawk preview, the market priced in roughly 65% odds that the Fed would hold rates steady again at the September meeting.

This pattern is actually similar to what happened in early July 2026, when BTC also surged from the US$62,000 level through a similar short‑squeeze mechanism. 

If the FOMC minutes turn out dovish, the rally could continue as organic buyers replace the forced buying pressure from liquidations. Conversely, if a hawkish tone dominates, Treasury yields could rise again toward 5.3% and momentum could swing back to the short traders who are still hanging on.

Read Also: How to Buy BTC: Complete Guide for Beginners in Indonesia

Conclusion

This US$1.23 billion Bitcoin short squeeze demonstrates just how quickly the crypto market can reverse direction when high leverage meets the right price momentum. The combination of falling Treasury yields, US debt buybacks, and piled‑up short positions created a domino effect that crushed three large Hyperliquid whales within minutes. 

Looking ahead, the market’s direction heavily depends on the tone of the FOMC minutes — dovish could extend the rally, while hawkish could return momentum to the bears. For traders, moments like this serve as a critical reminder of the risks of high leverage in a volatile market.

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FAQ

What is a short squeeze in crypto trading? 

A short squeeze happens when an asset’s price rises rapidly, forcing short traders to close their positions involuntarily through liquidation. These forced purchases push the price even higher, triggering a cascade of additional liquidations.

Why did Bitcoin price rise to US$68,424 on August 19, 2026? 

The rise was triggered by a drop in US Treasury yields following a long‑term debt buyback, which then set off a US$1.23 billion wave of short liquidations within one hour. The forced buying from those liquidations pushed BTC price up 2.5%.

Which whale suffered the biggest loss in this liquidation? 

Wallet 0x8c96 on Hyperliquid suffered the largest loss after its entire 1,800 BTC short position worth about US$117 million was fully liquidated. Two other wallets, 0x431f and 0x004e, were also fully liquidated with losses of US$44 million and US$33 million respectively.

Can this Bitcoin rally continue? 

The continuation of the rally depends on the tone of the FOMC minutes released a few hours after the liquidation. If dovish, the rally could extend; if hawkish, momentum could return to the bears.