Over $160 million in crypto short positions were liquidated after news of a US-Iran ceasefire triggered a sharp market reversal. Here's what happened and why it matters.

Over $400 million in crypto short positions were liquidated on April 8 after President Trump confirmed a two-week ceasefire with Iran, triggering one of the most aggressive short squeezes in the crypto derivatives market this year.

The $160 million figure circulating on social media appears to reflect a narrower time window; verified data shows the full 24-hour liquidation cascade was far larger. According to CoinDesk, nearly $600 million in leveraged crypto futures were liquidated on April 8, with over $400 million of that total coming from bearish short bets.

Bitcoin  BTC +0.00% surged to a session high of $72,699, up 5% in 24 hours, as traders rushed to cover positions. Ethereum  ETH +0.00% climbed as much as 7.4% to $2,273, and the CoinDesk 20 Index jumped 5% to 2,034 points.

How a Truth Social Post Triggered $600 Million in Liquidations

Trump posted to Truth Social on April 8, agreeing to “suspend the bombing and attack of Iran for a period of two weeks,” just  JST +0.00% before his self-imposed 8 p.m. ET deadline. Iran confirmed the ceasefire and said tankers could transit the Strait of Hormuz for the duration.

The announcement flipped risk sentiment instantly. Short liquidation occurs when a trader betting on price declines is forced to close their position at a loss because the market moved against them. When enough shorts get liquidated simultaneously, the forced buying creates a feedback loop that accelerates the price move upward.

This was not the first squeeze tied to ceasefire developments. On April 6, when initial ceasefire talks surfaced via a Pakistan-brokered Islamabad Accord proposal, $196.7 million in short positions were liquidated out of $273.8 million total across 81,819 traders, a 3-to-1 shorts-to-longs ratio. Bitcoin jumped from $66,634 to $69,350 on that initial move, a pattern consistent with how rising Iran-US tensions had previously pressured prices lower.

CoinMarketCap chart illustrating the price backdrop referenced in this article on bitcoin.

The largest single liquidation on April 6 was a $10.17 million ETH-USDT short on Binance. The April 8 confirmed ceasefire then doubled the damage, with over $400 million in shorts wiped out as the market moved decisively higher.

Oil Crash and Rate Cut Expectations Fueled the Rally

The ceasefire’s market impact extended well beyond crypto. WTI crude oil collapsed more than 10% to approximately $95 per barrel as Strait of Hormuz shipping fears eased. S&P 500 futures gained 1.9%, the Nasdaq rose 2.2%, and the Dow climbed 1.8%.

Derek Lim, research head at Caladan, explained the transmission mechanism: “Hormuz reopening would collapse the oil risk premium, which would pull forward rate cut expectations, which would re-lever the entire risk curve from equities to crypto.”

“It was the ceasefire negotiation reports from Iran, not Trump’s remarks, that contributed to Bitcoin’s price increase.”

The macro relief trade aligns with recent shifts in central bank positioning toward risk assets, where lower energy costs directly feed into lower inflation expectations and faster rate cuts.

Extreme Fear Persists Despite the 5% Rally

Despite Bitcoin’s sharp move higher, the Crypto Fear & Greed Index sat at 17 (Extreme Fear) on April 8. That disconnect between price action and sentiment is characteristic of a short-squeeze environment, where forced covering drives price rather than conviction buying.

CoinMetrics metrics view used to back the on-chain section for bitcoin.

Bitcoin was trading at $71,586 at press time with a market cap of $1.43 trillion and 24-hour volume of $56.5 billion. The price remained below the session high, suggesting some of the initial euphoria had faded as traders assessed the two-week ceasefire’s limited duration.

Polymarket odds for a lasting ceasefire by April 30 stood at roughly 30%, up from 18% before talks began. That implies the prediction market sees a meaningful chance the truce collapses, which could reverse the squeeze. Traders who followed recent ETF flow momentum into long positions now face a binary outcome on whether the diplomatic window holds.

The ceasefire is explicitly temporary. If it breaks down before the two-week mark, the same leveraged positions that were squeezed higher could unwind in the opposite direction, particularly with sentiment still anchored in Extreme Fear territory.