In the past 24 hours, the cryptocurrency market has witnessed a strong price surge, led by Bitcoin with an increase of over 3%, reaching $104,000 — the highest level since January 31. This development has surprised many traders and led to a series of short positions being liquidated due to unfavorable price fluctuations.

The momentum from macro information and ETF capital flow

Bitcoin's price surge occurred right after former U.S. President Donald Trump announced a comprehensive trade deal with the United Kingdom. Additionally, Bitcoin spot exchange-traded funds (ETFs) also recorded a record inflow of over $40 billion. These are positive signals that reinforce investor confidence in the long-term development of the cryptocurrency market.

The overall market has rebounded strongly

Not only Bitcoin, but the cryptocurrency market in general has also recovered significantly. The total market capitalization of all cryptocurrencies, excluding BTC, has increased by 10% to $1.14 trillion — the highest level since March 6. According to data from TradingView, this is the strongest recovery in nearly two months, indicating a widespread positive sentiment across the market.

A series of short positions liquidated

The unexpected uptrend has put traders betting on a price drop (short) on the defensive. As prices surged, these positions were "blown away" due to insufficient margin maintenance, leading exchanges to automatically close positions to avoid excessive losses. In just one day, nearly $400 million worth of short positions on BTC were liquidated — the highest level since November last year, according to data from Coinglass.

Notably, in addition to short positions, there were also about $22 million worth of long positions liquidated, indicating that significant volatility remains in the short term and not a few traders have misstepped even when betting on the upside.

Leverage leans towards the bears – a potential sign for the market

The massive liquidation of short positions reflects a leverage imbalance in the market, as bearish sentiment has dominated recently. Now, with the selling pressure being 'swept away', the space for the market's next uptrend is widening. If capital continues to flow into ETF products and macro factors remain positive, Bitcoin could reach new highs in the near future.