$150 Million in Crypto Shorts Liquidated as Bitcoin Closes in on $66K

Short Squeeze Follows Geopolitical De-escalation

About $150 million in short positions were liquidated following the U.S.-Iran peace agreement. The wipeout came as bitcoin climbed back above $65,000, after U.S. President Donald Trump declared the deal “officially complete” and said the Strait of Hormuz is now open.

Liquidations of this nature occur when an exchange forcibly closes a leveraged position because the trader can no longer meet margin requirements. Short liquidations happen when prices rise sharply, forcing bearish traders to buy back the asset, which can accelerate the very rally that triggered the squeeze.

The move came alongside a broader risk-on rotation as crude oil prices crashed roughly 4% behind news of the de-escalation (easing inflation fears and lifting appetite for risk assets). With the Strait of Hormuz, a waterway handling about 20% of global oil, set to reopen, traders unwound bets that had been built around a prolonged Middle East conflict.

For bitcoin, the rebound followed weeks of pressure, given the market had drifted lower amid sustained institutional outflows, leaving leveraged short sellers confident enough to press their bets. As soon as the peace announcement went live, all such positions unwound quickly.

Bitcoin.com News has documented repeated examples of this same scenario, including a single hour in which $150 million in shorts was liquidated as bitcoin cleared $80,000, and a 15-minute stretch that erased $320 million in shorts as bitcoin bounced toward $64,000.

Institutional Outflows Cloud the Rally

Despite the bounce, the institutional picture remains cautious. Spot bitcoin exchange-traded funds (ETFs) saw $316 million in net outflows during the week of June 8 to June 12, marking a fifth straight week of withdrawals, with spot ethereum ETFs recording a further $14.91 million in outflows over the same period.

That divergence (between a leverage-driven price pop set against steady fund redemptions) leaves the rally’s foundation uncertain. Liquidation-fueled moves can reverse as quickly as they appear once the forced buying is exhausted.

The next test will be whether spot demand returns to support prices once the short-covering fades. An official signing ceremony for the peace deal is scheduled for Friday in Switzerland, an event that could either reinforce the risk-on mood or, if it falters, hand momentum back to the bears.