In August, Bitcoin surged 24.6% in five days—its strongest week in two years.

Your group chat explodes. It’s all “the bulls are back, quick—go back in.” You open your wallet, glance at the coins you’re holding, and your heart starts racing.

Then you open the derivatives data—

Open contracts fell—not rose—by 12.6%.

You’re stunned.

After going up so much, the leverage is actually retreating? Who’s buying?

There’s only one answer: the short sellers who were forced to liquidate.

This isn’t a bull market. This is the burial of the bears.

What happened?

There’s a group of people in the market betting that BTC will fall. They borrow coins and sell them, waiting for the drop to buy them back, profiting from the difference. This is called “shorting.”

The problem is, when you short, you have to post margin. When the price doesn’t fall but instead rises, once it reaches a certain level the exchange’s system will automatically forcibly close the positions in your account—by directly placing market buy orders to close out the short position.

It’s not that they want to buy. The system is buying for them.

A short gets force-liquidated → market buy orders push up the price → triggers more short force-liquidations → more market buy orders → the price keeps rising.

A perfect death loop. The shorts’ own stop-loss orders became the most core fuel for pushing the price higher.

Glassnode’s derivatives report shows that over those five days in August, roughly 64,000 BTC worth of open contracts across the entire network were erased.

Of the liquidation funds, 89% came from shorts.

It’s not longs pushing up. It’s shorts being slaughtered.

Now look at the options market—

Before that, options traders had been willing for 361 straight days to pay a premium for put options higher than that for call options. 361 days—almost a full year. Fear of downside risk was baked into the pricing.

Then, on the very day in August that broke out, this 361-day-long bearish bias was completely flipped within a single trading day.

The market’s implied volatility index saw a single-day swing amplitude reaching 4 times the norm.

The market, in the most brutal way possible, completed a repricing of the bearish positions from the past year.

But institutions are telling you another truth.

The implied volatility of near-term options (1 week) jumped by 80%, but the implied volatility for out-of-the-money options at 3 months and 6 months basically didn’t move.

Translate this: The market is pricing this rally as a short-term liquidity event, not a trend reversal. Short-term panic-driven buying spree, while long-term expectations stay unchanged.

The futures curve is the same—wild adjustment in the near end, almost no movement in the far end.

Institutions are telling you with hard evidence: This isn’t the start of a bull market—it’s a technical short-covering.

Looking at the recent market again, this pattern is still continuing.

From September 20 to 21, Bitcoin touched $81,914 next again, driven by SEC tokenized stock exemption news. Over the past 24 hours, the entire network liquidated $401 million; of that, $241 million came from short positions being liquidated—1.5 times the amount liquidated from long positions.

The shorts are still being slaughtered. But this isn’t a bull market signal—it’s the inevitable backlash after shorts become maximally crowded.

The price is being “bought back,” not “pushed up.”

The former is shorts being forced out of their positions; the latter is longs initiating new positions.

The difference is: the former can’t be sustained, while the latter is the trend.

After everyone’s stop-loss orders have been hit, who else is left buying in the market?

Once the blood of the shorts is drained, who takes the next baton?

When everyone is shouting “the bull is back,” the data tells you:

The bull hasn’t arrived yet, but the bear was slaughtered first.