Bitcoin rose above US$80,000 on May 4, driven by a short squeeze in crypto derivatives, according to CoinDesk. The rally triggered approximately US$370 million in liquidations over 24 hours, including roughly US$301.9 million from short positions, according to CoinGlass, a crypto market data provider. Bitcoin briefly reached US$80,594, its highest level since January 31, before easing to approximately US$79,851.
Market Movement
Other major tokens also advanced alongside Bitcoin. Ether rose 2.3%, while XRP, BNB, Solana, and Dogecoin all posted gains.
Short Squeeze Mechanics
Much of the short interest that fed the squeeze did not come from simple bearish bets. Institutional hedging played a large role, with BTC perpetual futures—crypto derivatives that let traders bet on Bitcoin’s price without an expiry date—carrying a negative 30-day average funding rate for 46 straight days through April 15, 2026. Some positions sat inside market-neutral trades, including hedges against Bitcoin miner stocks or pair trades tied to MicroStrategy (MSTR) and its preferred shares (STRC). Sophisticated traders increasingly use derivatives to manage risk as well as take price views.
ETF Inflows and Market Structure
ETF inflows can tighten supply and change trading patterns in Bitcoin. During the last five days of April, US spot Bitcoin ETFs absorbed an estimated 19,000 BTC, well above the roughly 450 BTC mined each day. More of that buying came from longer-term allocators. According to CoinShares’ Q3 2025 analysis, investment advisors held 57% of institutionally reported Bitcoin ETF positions in 13F filings, a quarterly US regulatory filing that discloses certain equity holdings. CoinShares also reported more exposure among some university endowments including Harvard and Emory, as well as first-time reported ownership by Al Warda in the United Arab Emirates. Average portfolio allocation among reporting investors stayed below 1%.
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