Bitcoin (BTC) is up about 26% from its mid-August low after a short-term liquidation event accelerated the rebound. Glassnode said the August 19 move resulted in the largest single-day liquidation event since 2019.
Short positions accounted for for most liquidations in major centralized exchanges. The actual total was likely higher because the dataset excludes Hyperliquide.
ETF demand and large holders add support
The squeeze wiped out much of the liquidation liquidity around Bitcoin. Glassnode now sees short-term liquidation levels above the market and a smaller group of long-term liquidation levels below it.
The rebound was not driven solely by forced shutdowns, as spot demand also supported the move. U.S. spot Bitcoin ETFs saw $2.23 billion in net inflows over seven days, with no outflow days and their largest weekly inflow of 2026. The period included the largest ETF creation session since mid-January.
Meanwhile, Bitcoin continued to move away from exchanges as wallet groups changed their holdings. Entities holding between 1,000 and 10,000 BTC have reduced their balances by 50,500 BTC since June 30.
In contrast, entities holding more than 100,000 BTC added 59,100 BTC. This group includes exchanges, custodians and ETF-related wallets.
During the squeeze week, the custody group added 31,500 BTC. Glassnode said the amount was similar to weekly ETF creations, but the data does not show the same coins moved directly into ETFs.
Each wallet-sized cohort also moved into net accumulation on Glassnode’s 30-day trend score. The company called it the most persistent all-cohort buy since late 2024.
Bitcoin now faces a tougher test
Leverage has not returned at the same rate as the price of Bitcoin, with futures open interest falling 11% in BTC terms. Perpetual funding remained near neutral and then turned negative, suggesting limited pressure from new leveraged long positions.
Beyond accumulation and leverage, on-chain data places recent buyers below the price, while long-term holders are the main supply zone above. Bitcoin now trades between these groups, creating a key market test for demand.
Several indicators indicate similar overheads in the supply zone, including cost base levels, liquidity demanded, option positioning, and remaining liquidation clusters. Sustained movement in this area would show if buyers can absorb the available supply.
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