A wave of forced exits from bearish wagers on Ether triggered a sharp but short-lived rally across digital assets on Friday, as traders who had bet against the second-largest cryptocurrency were squeezed out of their positions.

Ether jumped as much as 8.3% during the session, its largest intraday gain since a similar spike three weeks earlier. Bitcoin rose less than 4%. Both tokens retreated from their intraday highs as the rally lost steam, underscoring the mechanical nature of the move rather than any fundamental shift in demand.

More than $300 million in Ether short positions were liquidated over the 24-hour period, according to data compiled by Coinglass. Bearish bets on Bitcoin saw roughly $212 million wiped out in the same window….