Charles Schwab says Bitcoin short squeeze is over as leverage resets and Fed stays hawkish

Bitcoin’s explosive August rebound was built on borrowed conviction, and Charles Schwab says the bill has come due. In its August 21 Weekly Trader’s Stock Market Outlook, Schwab confirmed that the short squeeze driving Bitcoin’s recent surge has run its course, citing a full leverage reset and a Federal Reserve that shows no sign of loosening up. A record liquidation event On August 19 alone, a record $1.37 billion in Bitcoin short positions were liquidated, nearly doubling the prior single-day record. Over August 19 and 20 combined, more than $2 billion in leveraged short bets were wiped out. Bitcoin, which had been trading around $65,000 heading into that stretch, rocketed to nearly $80,000 by the time the dust settled. That works out to roughly a 23% gain in a single week. To put the starting point in context, Bitcoin had already fallen somewhere between 45% and 53% from its all-time high near $126,000, reached in October 2025. The short interest that built up during that decline was, by any measure, substantial. When it unwound, it unwound loudly. Schwab’s report framed the move clearly: short squeezes like this are typically transient. The price action was real, the pain for s...