On November 4, Bitcoin short liquidations across all exchanges reached $290M. This was the largest daily total since September 21 ($346M). Daily data, however, hides where that squeeze came from. Hourly data shows it was fueled by leverage built only a few hours before.

Phase 1: Long flush (00:00–03:00 UTC). BTC fell to about $75.6K and roughly $53M in longs were liquidated. Open Interest dropped to $25.64B.

Phase 2: Leverage build-up (03:00–11:00 UTC). As price recovered toward $78.4K, OI rose by $1.5B (+5.9%) to $27.14B. Over the same window, the perpetual Taker Buy Sell Ratio averaged about 1.10, and 7 of the 9 hours printed above 1. Aggressive buyers were opening longs with market orders. Because every new contract has two sides, passive limit sellers were opening shorts into the rally.

Phase 3: Squeeze (14:00–16:00 UTC). Around the US open, about $250M in shorts were liquidated within two hours, and price spiked to $81.15K. OI then declined to $26.35B, which is almost the same level as before the rally ($26.24B at 12:00 UTC on November 3). In the hours that followed, the Taker Buy Sell Ratio slipped to 0.79–0.92, a sign of profit-taking.

Takeaway: The squeeze burned the leverage that had built up during the rally, and positioning is now close to where it started. Funding rates remain modest at about 0.0067%, so leverage is not overheated. On the other hand, there is little short-side fuel left. For BTC to break above $81K, the next leg will likely need fresh spot demand, because another squeeze has little left to work with.

Written by Crypto Mommy