Someone had a very bad hour. On September 3, roughly $58.2 million in crypto short positions were wiped out in a single 60-minute window, with Bitcoin accounting for $47.5 million of the carnage. For traders betting against the market with leverage, the price move was the financial equivalent of a rug pull, except the rug was their own margin.

Short liquidations happen when a trader’s leveraged bet against an asset hits its breaking point. The price rises far enough that the exchange force-closes the position to prevent further losses. That forced buying then pushes the price up even more, catching the next layer of shorts in a cascading squeeze.

The $47.5 million in Bitcoin short liquidations represented about 82% of the total crypto…