Quick Read
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Bitcoin's short squeeze wiped out $378 million in shorts and pushed it past $81,000, but the rally faded and the price slid back below $80,000.
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Shorts made up 93% of Bitcoin liquidations, yet open interest rose just 0.3%, so few new positions backed the rally.
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Only 38% of newer Bitcoin buyers are in profit, down from 97.5% in early October, which may invite selling into rallies.
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According to CoinGlass data, Bitcoin(CRYPTO: BTC) briefly surpassed $81,000 on November 4, 2026, following a short squeeze that wiped out $378 million in short positions in just one hour. However, this rally quickly lost momentum. As of now, Bitcoin is trading at $78,616, down 0.69% in the last 24 hours, and back under the $80,000 mark that it held for less than a day.
The surge began from a low of around $75,600 on election night, November 3, at 10 p.m. ET, and peaked the following morning at 10 a.m. ET, marking the busiest hour of either day. Despite this, Bitcoin is still down 8.09% over the past 30 days and remains 37.65% below its all-time high of $126,080. So, is the short squeeze already over?
Democrats' Congressional Sweep Caught Bitcoin Shorts Off Guard
The Democrats secured control of both chambers of Congress on November 3, causing Bitcoin's price to slide as the election results came in. James Butterfill, head of research at CoinShares, noted that this win was largely anticipated before the vote, setting the stage for a relief rally once uncertainty lifted. Traders who had opened short positions against Bitcoin were caught off-guard when the rally occurred.
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Short sellers profit from falling prices, often using borrowed funds on futures exchanges. If the price rises sharply, exchanges may automatically close trades, triggering liquidations. To close a short position, traders must buy back the asset, driving prices higher. This chain reaction is known as a short squeeze, which accounted for the rapid loss of $378 million in shorts.
Bitcoin's short squeeze on November 5 highlighted the nature of the rise. Of the $267 million in BTC liquidations that day, approximately 93% were short positions. Meanwhile, open interest, the value of contracts still active, rose only 0.3%, indicating that few new positions were replacing the liquidated ones, leaving the rally without its primary support.
Across the broader derivatives market that day, liquidations soared by 53% to $715 million, with about 65% of those being shorts. Additionally, funding rates, what one side of a futures contract pays to the other, turned mostly positive, suggesting that traders have begun to lean long.
Bitcoin Drops Below $80,000 as New Buyers Remain Underwater
Bitcoin closed at $80,443 on November 4, above its 20-day moving average of $80,232. However, it has since fallen back below both levels and now trades below its 50-day moving average of $82,006, indicating a medium-term downward trend, even though the longer-term trend remains positive on its 200-day average of $73,186.
Sellers re-emerged strongly on November 5, pushing Bitcoin back down again below $80,000 by 7 a.m. ET. The hour saw the heaviest trading volume since the short squeeze. Data from Glassnode shows that only about 38% of Bitcoin held by newer buyers is in profit, down sharply from 97.5% at the start of October. With most recent buyers at a loss, they may sell during rallies to try to recover their investments.
According to Glassnode, the average cost basis for active investors, representing the average price paid for actively traded coins, stands at $77,700, just below Bitcoin's current trading price. Support sits around $75,700, while a significant cluster of short liquidations sits near $87,000, potentially setting the stage for a second short squeeze. Here are the key support and resistance levels.
| Level |
Description |
Relation to Bitcoin's Current Price |
|---|---|---|
| $87,000 |
Short-liquidation cluster (Glassnode) |
Above |
| $82,006 |
50-day simple moving average |
Above |
| $81,000 |
Squeeze high briefly reached on Nov. 4 |
Above |
| $80,232 |
20-day simple moving average |
Above |
| $80,000 |
Round-number level Bitcoin fell below on Nov. 5 |
Above |
| $77,700 |
Active-investor cost basis (Glassnode) |
Below |
| $75,700 |
Support (Glassnode) |
Below |
| $75,600 |
Election-night low |
Below |
| $73,186 |
200-day simple moving average |
Below |
Demand for Bitcoin ETFs was weaker than the price action might suggest. U.S. spot Bitcoin ETFs saw a net inflow of $74.6 million on November 4, ending a three-day streak of outflows. While the iShares Bitcoin Trust( NASDAQ: IBIT ) lost $201.2 million, the Fidelity Wise Origin Bitcoin Fund( CBOE: FBTC ) gained $236.7 million.
Ethereum Surges While Solana Missed the Short Squeeze
In the week spanning from October 29, Bitcoin rose 1%, Ethereum(CRYPTO: ETH) gained 4.67%, and Solana(CRYPTO: SOL) fell 2.8%. In the past 24 hours, Ethereum is down 0.73%, and Solana has dropped 2.18%, mirroring Bitcoin's 0.69% decline.
Because Ethereum represents a smaller market than Bitcoin, it tends to reflect Bitcoin's movements more strongly, and this trend continues in both upward and downward directions. Over the past 30 days, Ethereum is down 12.7%, while Bitcoin's decline is limited to 8.09%. Ethereum's larger bounce appears to be a typical reaction to Bitcoin's moves, amplified by its volatility but lacking individual momentum.
Solana has fared worse, down 23.1% over the past 30 days, and is now trading at $92.80, well below its 20-day average of $100.29 and its 50-day average of $108.58. With Bitcoin accounting for 93% of short liquidations, far above the overall market's 65%, forced buying concentrated on Bitcoin left coins like Solana, already in a downtrend, with little direct benefit.
Can Bitcoin Maintain Its Position Above $77,700 Without the Shorts?
As the market adjusts, Bitcoin's future remains uncertain. The potential for a renewed squeeze hinges on whether it can hold above critical levels without further short-position liquidation.
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