Bitcoin Tops $64.5K After Low-Volume Short Squeeze

Bitcoin climbed to about $64,550 on Monday after a short squeeze forced 637 BTC in short liquidations, the largest single-day total since July 21. On-chain analytics firm CryptoQuant described the episode as a ‘low-volume liquidity trap.’

The rally lifted Bitcoin roughly 3% on the day. Before the move, prices had been trading near $62,750 following the weekly close. Funding-rate imbalances across exchanges preceded the squeeze: short positions were concentrated on Binance, Bybit, OKX and Deribit, while the funding rate on HTX briefly spiked to 0.05%.

Funding rates are periodic payments exchanged between traders holding long and short derivatives to keep futures prices aligned with spot. Sudden shifts in those payments can force rapid unwinds of positions. Trading data show total short liquidations of 637 BTC on Monday, the highest daily tally since July 21.

CryptoQuant described the crowded short positioning as the main catalyst for the squeeze and noted aggregate funding fell from about 0.006% to 0.003% over 24 hours, a change linked to renewed short exposure.

Spot-market participation remained thin. Futures accounted for most trading volume during the recent range while spot traders showed limited interest. U.S. spot Bitcoin exchange-traded funds recorded $267.2 million in net outflows over the past week.

On-chain holder metrics showed short-term holders-addresses holding outputs for less than 155 days-have an average cost basis near $68,700, which can act as resistance while those buyers remain underwater.

CryptoQuant warned that a break below $60,000 combined with rising exchange inflows could increase downside risk toward $50,000. Traders continued to monitor funding-rate shifts and exchange flows as indicators of near-term direction.