Bitcoin continued its relentless climb toward $75,000 on Friday, with ether and solana joining the rally as another $1 billion in bearish crypto positions were liquidated, bringing the total short squeeze damage to more than $4 billion over just two days.
Bitcoin rose nearly 8% during Asian morning trading hours, briefly crossing $75,500 before pulling back to trade just below $75,000. The weekly gain now stands at approximately 18%, marking one of the strongest weekly performances of the year. Ether added nearly 5% to reach $2,350, bringing its seven-day gain to 24.5%, while Dogecoin surged almost 9% and Solana posted strong gains as the rally broadened across the cryptocurrency market.
The Short Squeeze Continues
The liquidation of bearish positions has been a primary driver of the rally, with more than $1 billion in shorts wiped out in the latest 24-hour period. This follows the record $3 billion in short liquidations on August 20, bringing the two-day total to over $4 billion. When shorts are liquidated, the forced buying creates upward pressure on prices, which can trigger additional liquidations in a cascading effect that amplifies price movements.
The sustained squeeze suggests that many traders had positioned themselves for continued declines, underestimating the strength of the current rally. With Bitcoin having gained 18% in a week, those bearish positions have become increasingly costly to maintain, forcing traders to cover their shorts by buying back into the market. For more on the record liquidation event, see our coverage of the $3 billion short liquidation.
What Is Driving the Rally
The current rally is being driven by a combination of factors including improving regulatory prospects in the United States, growing institutional adoption, and macroeconomic tailwinds. Treasury Secretary Scott Bessent's push for the CLARITY Act and the SEC's crypto regulation proposal have improved sentiment around regulatory clarity, while record Bitcoin ETF inflows of $517 million signal strong institutional demand.
The Fear and Greed Index has climbed to 62, its highest level since October 2025, indicating growing optimism among market participants. Coinbase CEO Brian Armstrong's assessment that Bitcoin may be entering its next bull cycle has further boosted sentiment. The rally has also been supported by Treasury buyback operations that have injected liquidity into the market. For more on the bull cycle thesis, see our coverage of Coinbase CEO's bull market prediction.
Ether Outperforms
Ether has been the standout performer in the current rally, gaining 24.5% over seven days to reach $2,350. The ether rally has been driven by a combination of factors including the broader market optimism, growing institutional interest in Ethereum, and the $189 million in ether ETF inflows that marked the largest inflows in months.
The strength of the ether rally is significant because it suggests that the current market movement is not just a Bitcoin-specific event but a broader crypto market rally. When ether outperforms Bitcoin, it often signals that investors are becoming more risk-tolerant and willing to allocate to alternative cryptocurrencies. This broader participation could support the sustainability of the rally, as it indicates genuine market enthusiasm rather than a single-asset phenomenon. For more on ether ETF inflows, see our coverage of the record ETF inflows.
What Comes Next
As Bitcoin approaches $75,000, the key question is whether the rally can continue or whether a correction is overdue. Bitcoin has gained 18% in a week, a pace that is historically difficult to sustain. However, the combination of improving regulation, institutional inflows, and the short squeeze dynamic could continue to push prices higher in the short term.
The September 15 Senate procedural vote on the CLARITY Act will be a critical event for the market. If the bill advances, it could provide a further catalyst for the rally. If it fails, the resulting disappointment could trigger a correction. In the meantime, the liquidation data suggests that the squeeze may not be over yet, with significant short interest remaining at higher levels. For more on the CLARITY Act, read our coverage of the Senate political dynamics.
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