Bitcoin surges above $115,000, millions in short positions liquidated

Bitcoin, ether and other major cryptocurrencies rose as of Sunday night, boosted by trader optimism about macroeconomic conditions and vast amounts of short liquidations in the past day.

According to The Block's crypto price page , bitcoin rose 3% in the past 24 hours to trade at $115,179, its highest level in two weeks. Ether surged 6% during the period, changing hands at $4,187. XRP and BNB each gained about 2%, while Solana climbed 5.7%.

"These price movements are not isolated spikes but part of a broader, sustained trend supported by macroeconomic tailwinds, tightening on-chain supply, and strong technical indicators," said Rachael Lucas, crypto analyst at BTC Markets.

Multiple major news outlets reported over the weekend that the U.S. and China have preliminarily agreed to a framework for a potential trade deal when Donald Trump and Xi Jinping meet in South Korea this coming Thursday. 

"Markets are responding positively to the prospect of improved U.S.-China relations, which could ease global supply chain constraints and support risk assets, including digital currencies," Lucas added.

The U.S. Federal Open Market Committee meeting is also scheduled for Tuesday and Wednesday, with market experts and analysts largely expecting another interest rate cut. The CME Group's FedWatch Tool indicates a 96.7% chance that rates would be lowered by 25 basis points to 3.75%-4.00%.

Short liquidations

As prices recovered on positive macro signals, the market saw a substantial amount of short positions liquidated. It was reported earlier that $160 million worth of short bets were liquidated in a span of just 30 minutes. 

"Million in short liquidations indicate a classic short squeeze within bearish traders were forced to cover as prices surged, accelerating the move upward," said Vincent Liu, CIO at Kronos Research. "Crowded short positioning meets sudden bullish momentum, amplifying volatility to the upside."

Coinglass data shows that around $347.5 million in short positions were liquidated in the past day, with $195 million worth of short liquidations happening in the past four hours. 

"Most liquidations occurred in BTC and ETH perpetual contracts, triggered by a modest price increase," Lucas said. "This reflects a classic short squeeze dynamic and may signal the start of a more sustained bullish phase."

Santa Claus rally

Traditionally, the crypto market experiences a notable uptick in prices nearing year-end, an event dubbed the "Santa Claus Rally." Analysts said this year may follow the trend.

"Given the historical precedent of the Santa Rally, we anticipate a continuation of bullish momentum leading up to year-end, particularly following the 2024 halving cycle," LVRG Research Director Nick Ruck told The Block.

BTC Markets' Lucas said analysts view a 15% to 25% rally from current price levels as plausible, with bitcoin potentially reaching $130,000 to $150,000 by the end of 2025. Bitcoin's all-time high stands at $126,080.

"The 'Santa Rally' hinges on holiday liquidity, portfolio reshuffling, and bullish sentiment," Kronos Research's Liu said. "With macro cues from FOMC and PCE reports, alongside anticipated rate cuts and trade optimism, upward momentum seems likely, though volatility could persist amid shifting macro dynamics."