Short Squeeze Dominates Crypto Futures Liquidations as Bitcoin Holds $96k

VADODARA, January 15, 2026 — Cryptocurrency perpetual futures markets experienced a significant short squeeze over the past 24 hours, with forced liquidations totaling approximately $270 million across major assets. According to data from Coinness, Bitcoin (BTC) led with $178 million liquidated, where short positions accounted for 86.79% of the volume. This daily crypto analysis reveals a market structure under pressure, as leveraged traders face heightened volatility near key technical levels.

Market Context & Background

Futures liquidations often act as a leading indicator for market sentiment shifts, particularly in crypto where leverage ratios can exceed 50x on some platforms. The current environment mirrors patterns observed in late 2024, when a similar short squeeze preceded a 15% rally in Bitcoin's price. Underlying this trend is the broader macroeconomic backdrop, where the Federal Reserve's monetary policy decisions, as documented on FederalReserve.gov, continue to influence risk asset correlations. Consequently, traders are positioning defensively, with short bets reflecting skepticism despite Bitcoin's current price of $96,309. Related developments include the recent surge to $97,500 and the postponement of US crypto legislation, both adding to market uncertainty.

What Happened?

Over the last 24 hours, forced liquidation volumes for cryptocurrency perpetual futures were reported by Coinness. Bitcoin saw $178 million liquidated, with short positions dominating at 86.79%. Ethereum (ETH) followed with $82.11 million liquidated, where shorts accounted for 64.45%. The RIVER token recorded $10.05 million in liquidations, with short positions at 76.92%. These figures indicate a concentrated move against bearish leveraged positions, likely triggered by a price bounce from recent lows. Market structure suggests this is a classic liquidity grab, where bulls force shorts to cover, creating upward momentum.

Technical Analysis & Price Action

Bitcoin's current price of $96,309 sits above the critical 50-day exponential moving average (EMA) at $94,200, but faces resistance near the $97,500 level, which aligns with a previous Fair Value Gap (FVG). The Relative Strength Index (RSI) on the 4-hour chart reads 58, indicating neutral momentum with slight bullish bias. Volume profile analysis shows increased activity around $95,000, suggesting a key support zone. Bullish invalidation is set at $94,500; a break below this level would signal a failure of the current uptrend and likely trigger further liquidations. Bearish invalidation lies at $98,200, where a breakout could accelerate a gamma squeeze as options markets react.

By The Numbers

Why It Matters

For institutional investors, high short liquidations reduce counterparty risk in derivatives markets but also signal overcrowded positioning, which can lead to sharp reversals. Retail traders face increased margin call risks, especially with leverage tools amplifying losses. The dominance of short liquidations suggests that bears are being squeezed out, potentially paving the way for a sustained rally if spot demand follows. However, this also creates a fragile equilibrium; a sudden influx of long positions could trigger a cascading effect if support levels fail. Market analysts note that such events often precede volatility expansions, impacting portfolio hedging strategies.

Community Sentiment

On social platforms, sentiment is divided. Bulls argue that the short squeeze indicates underlying strength, with one trader stating, "This is a classic bull trap reversal pattern." Bears counter that the liquidations are a temporary flush, with long-term holders remaining cautious. The overall tone leans toward cautious optimism, but without a clear catalyst, uncertainty persists. This aligns with the broader liquidity consolidation seen on exchanges and recovery efforts like the Sonic Labs token retrieval.

Price Prediction / Future Outlook

Bullish Case: If Bitcoin holds above $94,500 and breaks $98,200, a move toward $102,000 is plausible, driven by continued short covering and spot accumulation. Ethereum could follow, targeting $6,500 based on its EIP-4844 upgrade reducing layer-2 costs.

Bearish Case: A breakdown below $94,500 could trigger a cascade of long liquidations, pushing Bitcoin to test $90,000 support. This scenario would likely see the Fear & Greed Index drop into fear territory, exacerbating sell pressure.