A wave of forced liquidations exceeding $750 million swept through cryptocurrency derivatives markets as Bitcoin broke above $85,000 and major altcoins extended their rallies, catching leveraged short sellers off guard and triggering a cascade of automatic position closures.

The cross-asset surge marked a significant shift in short-term momentum, with Bitcoin registering a new local high while Ethereum, XRP, and Solana all posted synchronized gains. The move was amplified by a mechanical feedback loop in which rising prices forced traders holding short positions to buy back assets, adding further upward pressure.

Short Squeeze Mechanics Drive the Cascade

The liquidation event reflects how leveraged derivatives positions can magnify spot…