A massive short squeeze in 2026 erased $593 million in bearish positions overnight. On Saturday afternoon, Iran reportedly reversed its decision to reopen the Strait of Hormuz.
Key Takeaways:
- Bitcoin briefly climbed past $78,000 during a violent short squeeze following Iran’s announcement that the Strait of Hormuz was fully accessible and Donald Trump’s assertion that Tehran had agreed to indefinitely halt its nuclear activities.
- This surge resulted in approximately $762 million in crypto liquidations, primarily targeting short positions, with Bitcoin responsible for about $382 million and Ether for $167 million, as funding rates had remained negative for several weeks.
- Market participants are monitoring the $76,000 to $78,000 range as a critical resistance level; a decisive breakout could pave the way for Bitcoin to reach its $94,000 yearly opening price and its $126,000 all-time high, while other major cryptocurrencies also posted strong weekly increases.
One of the most significant short squeezes of 2026 unfolded and resolved within a single trading session.
Bitcoin rose to $78,000 late Friday, triggering $762 million in liquidations across 168,336 traders, with $593 million of that amount coming from short positions, according to CoinGlass.
By Saturday evening in Asia, Bitcoin had retreated to $76,091, marking a modest 0.8% daily gain, as Iran announced that the Strait of Hormuz was closed to maritime traffic again, less than 24 hours after its foreign minister declared it fully open.
Two tanker owners reported to Bloomberg that their vessels received Iranian radio transmissions closing the waterway, with one supertanker reporting gunfire and aborting its transit.
State news agency Nour stated that Hormuz had returned to «strict management and control by the armed forces» in response to a U.S. blockade of Iranian shipping. Several oil tankers that had rushed toward the strait on Friday following the initial reopening news turned back.
Friday’s breakout rally ultimately led to a $590 million rout of short positions, with Bitcoin bets accounting for $381 million in liquidations, the largest share, followed by Ether shorts at $167 million. Shorts outweighed longs by nearly four to one, marking the cleanest short-heavy breakdown in a liquidation event since February.
The conditions for this squeeze had been building for weeks. Funding rates on Bitcoin perpetuals were pinned negative, meaning shorts were paying longs a premium to hold their positions.
Friday’s Hormuz reopening served as the catalyst that flipped the market. Crude oil dropped nearly 10% to $85.90 per barrel on the initial headline, and Bitcoin broke above the $76,000-$78,000 zone that has capped every rally attempt since the February 5 crash.
President Donald Trump then told reporters Friday night that Iran had agreed to an «unlimited» suspension of its nuclear program, though Tehran never confirmed the claim.
None of that optimism survived into Saturday intact.
The market pattern is now familiar, where ceasefire headlines drive a rally but a reversal headline arrives before the breakout can consolidate. The forced unwind gets another setup to work against.
Ether held up better than Bitcoin on the retreat, down just 0.2% over 24 hours while Solana dropped 1.3% and Dogecoin fell 2.1%. On a weekly basis, Ether is still up 5.2%, XRP leads at 6.4%, BNB added 4.6%, and Bitcoin sits at 4.5%.
Whether the $76,000 zone holds into Monday’s open is now the question. A clean weekly close above $76K would preserve the structural break even if the peace trade keeps whipsawing.
A loss of the level and Bitcoin is back in the same range it has been trapped in since March, only this time with the short base that just got wiped looking to rebuild.