From Record Short Squeezes to Massive ETF Inflows: Everything Driving Bitcoin Right Now

The short squeeze sparked the rebound, but ETF and on-chain data suggest broader demand is now helping.

Bitcoin (BTC) has risen about 26% from its mid-August low after a short-liquidation event accelerated the rebound. Glassnode said the August 19 move produced the largest one-day liquidation event since 2019.

Short positions accounted for most of the liquidations across the major centralized exchanges. The actual total was likely higher because the dataset excludes Hyperliquid.

ETF Demand and Large Holders Add Support

The squeeze cleared much of the liquidation liquidity around Bitcoin. Glassnode now sees short-liquidation levels above the market and a smaller pool of long-liquidation levels below.

The rebound was not driven only by forced closures, as spot demand also supported the move. US spot Bitcoin ETFs recorded $2.23 billion of net inflows over seven days, with no outflow days and their strongest weekly intake of 2026. The period included the largest ETF creation session since mid-January.

Meanwhile, Bitcoin continued moving away from exchanges as wallet groups changed their holdings. Entities holding between 1,000 and 10,000 BTC reduced their balances by 50,500 BTC since June 30.