Crypto markets had over $700 million in liquidations on short trades, or bets against price rises, reaching levels not seen since July 2021.

The liquidations may have contributed to a short squeeze because prices of several tokens jumped in the past 24 hours. Longs, or traders betting on higher prices, saw an additional $100 million in liquidations amid short-term price volatility.

Ether (ETH) jumped 10% to lead the surge among major cryptocurrencies, with Cardano's ADA, Solana's SOL and dogecoin (DOGE) adding some 9% and bitcoin (BTC) adding a tamer 4.3%. The overall market capitalization of the crypto market increased 4% regaining the $1 trillion mark, a level previously seen in August.

Liquidations occur when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader cannot meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).

Crypto exchange FTX recorded over $519 million in short liquidations, the most among its counterparts, followed by OKX at $71 million and Binance at $46 million. Some on Crypto Twitter remarked the move was unusual.

Bitcoin-tracked futures saw some $368 million in both long and short liquidations, followed by ether futures at $356 million. Among the other majors, ADA futures had $16 million in losses for traders.

Meanwhile, open interest, or the amount of outstanding derivative contracts that have not been settled, increased by 6.6%, implying traders opened more positions in anticipation of a further price surge.

The moves came amid a rise in broader equity markets. The tech-heavy Nasdaq ended Wednesday 2.25% higher and the S&P 500 added 1.63%. Asian markets rose on Thursday, with Japan’s Nikkei 225 increasing 0.90% and Hong Kong’s Hang Seng adding 0.63% since the open.