It looked a lot like late August. Bitcoin ran higher then, setting off the biggest short-liquidation wave recorded since 2021. On Friday, Ether was doing it. The price moved so fast that it looked like traders were chasing the rally more than buyers were piling into spot.
A lot of traders had been sitting back since August. After the last big leverage flush, there still had not been much fresh news to bring everyone back.
Ethereum burns through shorts as traders pay to keep betting against it
According to Coinglass, around $188 million in Ether positions were wiped out in one hour as the price kept climbing.
Across crypto, close to $500 million in long and short positions disappeared over the past day. That was one of the biggest totals since Bitcoin’s record short wipeout last month.
Binance saw about $76 million in Ether positions liquidated over 24 hours. McCarthy said most were shorts that had to close. Ether perpetual futures were also showing negative funding rates. Those contracts are used for leveraged crypto trades.
Where financing costs are below zero, the short-siders on Ether had to pay for their positions, while those on the other side were being paid to take the position. But now that Ether has begun moving higher, those shorts have less room to just wait it out.
Bitcoin has been rising too. The Bitcoin price has moved by some 20% over the past month, putting it back above $80,000. But 2026 is negative for Bitcoin. It is down close to 10% this year. The coin also went above $81,000 in late August before losing some of those gains.
The rebound came after crypto began recovering from the August 19 liquidation event, one of the biggest leverage blowups the market has seen in recent years. Even that was small next to October 10, 2025, when roughly $19 billion in leveraged crypto positions were wiped out in one day.
Bitcoin ETF flows have picked up too. The iShares Bitcoin Trust (NASDAQ: IBIT) brought in about $3.5 billion in net inflows over the past month. That left the fund close to even for the year after earlier outflows.
Bitcoin traders now have Congress and tech stocks sitting in the background
There is another problem with Bitcoin. There has been no clear differentiation of Bitcoin from technology stocks. The correlation data indicates that there is still linkage between Bitcoin and the appetite for risk associated with tech stocks.
In cases where investors become scared, the risky positions are trimmed, which might also include Bitcoin.
Then there is Washington. The U.S. Senate is expected to hold an important procedural vote next week on the Clarity Act. The bill is supposed to set federal rules for digital assets. Lawmakers have spent most of the year trying to get it through Congress, and it still has not made it over the line.
Coinbase Global (NASDAQ: COIN) CEO Brian Armstrong told CNBC’s “Squawk Box Asia” this week that he thinks the bill will pass after crypto companies, law-enforcement groups and several banks found common ground.
Brian also said the industry would still have another way forward if Congress does not pass it. “Frankly, if it doesn’t pass, it’s also going to be a good outcome because the SEC and the CFTC have said that they’re ready to publish rulemaking, and we’re going to get regulatory clarity one way or another on the 15th or the day or two after,” he said.
Prediction markets are less sure. Traders there still do not see the bill as a sure thing after Congress spent the year trying, and failing, to get major crypto legislation passed.
