Data shows the crypto futures market has seen a large amount of liquidations on Wednesday as Bitcoin has registered a sharp surge.

On Tuesday, August 29, news broke out that Grayscale has emerged victorious against the United States Securities and Exchange Commission (SEC) in its lawsuit. Bitcoin enthusiasts have long speculated that this victory could pave the way for a spot Bitcoin Exchange Traded Fund (ETF), so, it’s not surprising that the market has positively reacted to it.

Until Tuesday, BTC had been stuck in consolidation for quite a while, but with the news, the cryptocurrency finally escaped out of this sideways movement in spectacular fashion as its price shot up toward the $28,000 level.

The asset couldn’t maintain at those high prices for long, however, as it soon retraced back toward the current $27,400 mark. The below chart shows the volatile price action that BTC has observed recently.

Even with this pullback, though, Bitcoin has been able to hold onto the majority of its returns. With profits of almost 6%, BTC is the best performer among the top 10 coins in the crypto sector in the last day.

As the price action in the past 24 hours has been quite sharp, the futures market has naturally gone through some chaos. Here’s a table that shows the data related to liquidations in the sector during this period:

It would appear that the crypto futures market has observed liquidations amounting to $170 million in the past 24 hours, which is undoubtedly a pretty significant amount.

Only around $22 million of these liquidations occurred within the last 12 hours, however, as most of the volatility was restricted to the previous 12-hour period.

From the table, it’s also visible that $120 million of the liquidations came from the short contracts alone, representing 70% of the total. The liquidation event was triggered by a sharp rally across the market, so it would make sense that the shorts would be the ones who have taken most of the brunt.

The amount of long liquidations ($50 million) still isn’t insignificant, though, as the pullback BTC saw from $28,100 to $27,400 also punished the speculators who came late to the party.

The event on Wednesday is an example of a “liquidation squeeze.” In squeezes, a mass amount of liquidations happens following a sharp swing in the price, and these liquidations only end up feeding the price move further.

This amplified price move then ends up causing even more liquidations in a sort of chain reaction. So as the majority of the liquidations in the past day were shorts, the event was a “short squeeze.”

Large futures flushes like the one in the past day aren’t something that uncommon in the crypto sector, owing to the fact that the coins are generally quite volatile and absurd amounts of leverage can be easily accessible across most of the platforms.

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