Bitcoin Short Squeeze Fades to $83K as Chip Earnings Week Looms

Short squeezes, not conviction, drove Bitcoin's run past $79K

The line about Bitcoin "ripping past $79K" has been repeated through the autumn, but the event behind it took place in August, and most of what followed was driven by leverage. On August 20, about $3 billion in bearish crypto bets were liquidated, the biggest single-day short wipeout in records going back to 2021. Another $1.2 billion of shorts were cleared over the next 24 hours, taking the two-day total past $4 billion.3 Bitcoin reached an intraday high of $79,320 during that move, then settled near $77,137, which still left it up 23.2% for the week.6

Outlets agree on the direction of that rally and disagree on how high it went. CoinDesk reported Bitcoin topping $77,000 and gaining about 22% on the week.3 The Coin Republic said the price broke above $79,000 on August 21, then noted that CoinMarketCap data showed it trading closer to $77,000 after it fell back from the daily high.2 The best reading is that $79K was a brief wick and not a level the market held. That distinction matters because this kind of headline keeps returning to the number.

The drivers were partly policy and partly market mechanics. CoinDesk linked the start of the rally to the U.S. Treasury doubling its long-end bond buybacks from $2 billion to $4 billion per operation, which loosened conditions in the Treasury market.3 Decrypt, as syndicated, pointed to positive signals from Washington, including President Trump backing the Clarity Act and indicating that regulators were working to bring Hyperliquid onshore.6 CoinDesk also made the key point clearly: traders who are forced to buy back their shorts are covering losing bets, not deciding Bitcoin is worth more.3

The squeeze kept repeating

What happened next shows a market that keeps squeezing shorts without building a trend. Bitcoin went above $82,000 on September 3 as about $250 million in shorts were liquidated, then fell back to $79,200. Open interest stayed near $54 billion, so the leverage had not gone away.7 Within days it was back below $79,000, and about $208 million in long positions were liquidated in that drop.4 On September 18 it went above $80,000 again, and more than $183 million in shorts were wiped out in about an hour. Crypto Briefing reported this happened shortly after a 25-basis-point Federal Reserve hike and a Bank of Japan rate increase.5

The CoinDesk view that these moves were mechanical and not driven by demand has mostly held up. Some on-chain analysts did argue the August move was more than leverage. CryptoQuant's Bull Score went above 60 for the first time since October 2025, with six of its ten components positive, including demand growth and stablecoin liquidity.2 The same researcher said the score needed to stay above 60 to confirm the move.2 Bitcoin reached its highest level since January in early October, then lost ground again. That pattern looks more like a range than a breakout.13

October: yields, oil and an AI scare

The events that actually moved prices this month were in bonds and big tech stocks. On October 7, the 10-year Treasury yield rose above 5.36% before settling near 5.32%, its highest level since April 2002. Brent crude was trading around $101.18 Bitcoin dropped about 3% that day to roughly $82,962 from close to $85,700 overnight. Strategy, Coinbase, Robinhood, Mara and Circle all fell with it.18 Roughly $696 million in liquidations followed, nearly all of them long positions. That was the reverse of the August squeeze.13

On October 8 the pressure moved to AI stocks. The Nasdaq fell about 1.3% after a Financial Times report raised questions about OpenAI's revenue. Nvidia, Micron and Intel all declined.12 Schwab called it the Nasdaq's worst day since mid-August. It also noted that six of the S&P 500's 11 sectors closed higher, with energy up nearly 3% as oil climbed.15 Bitcoin hit its lowest level in about three weeks, near $81,000, and Yahoo Finance tied that drop to rising oil prices and bond yields.12 Benzinga reported Bitcoin trading between $80,912 and $83,645 that session as higher yields hit risk assets.17

The chip selloff was broad. One screen counted 34 U.S. semiconductor stocks with market values above $10 billion that were down more than 1%. Arm, Intel and Marvell were among the hardest hit.27 The same analysis said most of the sector still traded at high multiples after the drop. It cited Arm at 136.5 times forward earnings and AMD at 82 times. Memory names stood out as cheaper, with Micron near 6 times forward earnings.27

Stocks recovered on Friday. The S&P 500 closed at 7,811.54 and the Nasdaq Composite at 27,366.17.11 Over the week the S&P 500 rose about 1%, the Dow about 0.9% and the Nasdaq about 0.5%.19 Bitcoin rose about 1.9% to around $82,900 after its Thursday drop.14 Over the weekend Yahoo Finance had it near $83,700.11

Chip earnings will test the AI trade

The next major market event is semiconductor earnings, and the numbers leading into it are very strong. TSMC said September revenue rose 54.6% from a year earlier, and revenue for January through September was up 41.1%.26 Micron reported fiscal fourth-quarter revenue of $54.23 billion, up from $11.32 billion a year earlier, and guided to about $61.5 billion for the next quarter. Its shares still closed flat because so much good news was already priced in.26 Samsung reported that third-quarter operating profit rose 780.3% to $80.2 billion.24 Industry data points the same way: the Semiconductor Industry Association said global chip sales passed $1 trillion through August, the first time they have done so that early in a year.30

The schedule is tight. ASML reports on October 14, TSMC on October 15 and Lam Research on October 21. Analysts expect about 49.5% revenue growth at ASML, 37% at TSMC and more than 53% at Lam.22 Jim Cramer said a weak TSMC report could drag down most semiconductor stocks, while a strong one could set off a very large rally.21 The same week brings bank earnings and the producer price index.21

The outlook is mixed. Goldman Sachs saw a better setup heading into third-quarter reports after what it described as significant de-risking. It said the SOX index had fallen 11% over two months while the S&P 500 gained 4%.23 Other coverage described a rally, with the iShares Semiconductor ETF up 11% in September and trading at about 43 times earnings.26 These accounts cover different periods, but the conclusion is the same: expectations are very high. Given how Micron's shares reacted, results that only match forecasts may not lift the group.26

This is also where crypto and chips meet. Both are high-beta trades that depend on liquidity, and both fell this month when the 10-year yield moved toward 5.3%.18 A strong TSMC report would probably help risk appetite across the market. If the AI trade weakens while yields stay high, Bitcoin, which has already failed several times to hold above $80,000, has little cushion.1215

How to read the Pepeto claims

The "Pepeto surges" part of the headline comes from paid promotion, not market reporting. Press releases distributed through TokenWire and GlobeNewswire say the project's presale has raised more than $11 million. They also claim 40,000 holders, a coming Binance listing and staking yields above 160% APY.3539 One release promises that "analysts" expect a 300x gain and says a $200 purchase could grow to $60,000.39 Those projections come only from the promotional material. The releases do not name the analysts, and Binance has not confirmed any listing in the coverage reviewed here.

The releases also disagree with each other. One says Bitcoin crossed $79,000 "for the first time since May."31 Another, published around the same time, says Bitcoin went past $80,000 for the first time since May.31 Meanwhile, CryptoQuant data reported elsewhere had Bitcoin above $82,000 in May.2 The promotional pieces use each Bitcoin headline to make the same pitch, which is that the large coins have finished their run and a presale token has not.3236 Readers should treat these as advertising.

Outlook

Bitcoin is trading near $83,000, about 34% below its record of roughly $126,000.39 It has been moving between $76,000 and $86,000 mostly on the basis of liquidations, while yields and oil set the overall direction.718 The market events with the most weight this week are ASML on Wednesday and TSMC on Thursday. The real question is whether chip earnings can support high valuations when the 10-year yield is above 5%, not whether Bitcoin can briefly reach $79K again.1522 I expect Bitcoin's next major move to follow the chip earnings, with leverage making it larger in either direction.