Bitcoin's Record Short Squeeze Signals Bull Market Reset

Bitcoin surged 23% over the past week, its strongest one-week return since the post-election rally in November 2024, as a record short squeeze and shifting macro backdrop prompted analysts at K33 Research and Bitwise to compare conditions to previous bull market onsets.

Record short squeeze triggers leverage reset

A record $1.37 billion in bitcoin shorts were liquidated on Aug. 19, nearly double the previous daily high of $757 million from July 2021, followed by another $739 million on Aug. 21, according to K33 data.

The squeeze pushed notional perpetual futures open interest down to 284,000 BTC, its lowest since May, while funding rates returned to neutral.

Spot and perpetual futures volumes jumped 188%, while CME volumes rose 152%.

Bitcoin ETF products recorded net inflows of 31,740 BTC, their strongest week since the October 2025 highs.

Moving average reclamation mirrors past cycles

K33 Head of Research Vetle Lunde noted that bitcoin reclaimed its 50-day, 100-day, 200-day, and 200-week moving averages in just four days, faster than any prior cycle.

Lunde wrote in a report titled “Altitude sickness can wait”:

“The only previous occasions when it reclaimed all four within 45 days came in October 2015, April 2020, and October 2023, each around the beginning of a cyclical bull market.”