Short Squeeze Lifts Dogecoin 15% as Bitcoin Holds Near $85,600

Dogecoin climbed past 10 cents on Tuesday morning in Asia, a gain of more than 15% that made it the strongest performer among large tokens, according to CoinDesk price data. Bitcoin traded just above $85,600, little changed over the prior hour after rising about 5% across 24 hours. The bulk of that advance came from traders being pushed out of bets against the market.

Roughly $1 billion in crypto positions were liquidated over the past day, CoinGlass data show, and about $844 million of that total — 82% — belonged to short sellers. Around 135,000 traders were closed out. Bitcoin positions accounted for roughly $608 million of the damage and ether about $181 million. The largest single closure was a bitcoin position worth nearly $21 million on the Hyperliquid exchange.

A short is a wager that a price will fall: the trader borrows the asset, sells it, and hopes to buy it back cheaper. Because the borrowed asset must eventually be returned, the trader posts collateral. If the price rises far enough that the collateral no longer covers the loss, the exchange closes the position by buying the asset on the trader's behalf. That buying pushes the price higher still, dragging the next layer of shorts past their thresholds — a feedback loop known as a short squeeze.

The squeeze has run its course

Liquidations in the past hour totaled under $11 million, down sharply from more than $300 million an hour during the peak of Monday's move. That slowdown means further gains now require fresh buying rather than the mechanical purchases that accompany forced closures.

The rally was broad. XRP added 7% to nearly $1.52 and SOL 5% to just under $117. Ether rose 3% to nearly $2,740, while BNB and TRX each gained between 1% and 2%. ZEC was the lone large token in negative territory, falling 4% to just above $1,450.

Equities set a firm backdrop through the Asian session. MSCI's Asia Pacific gauge gained nearly 1%, its fifth consecutive advance, led by chipmakers Samsung Electronics and SK Hynix, which followed Monday's rally in U.S. semiconductor stocks. South Korea's Kospi rose 2% and Taiwan's benchmark touched an intraday record.

The driver behind the equity move is artificial intelligence. Meta Platforms released an AI agent called Muse nearly two weeks ago that operates across Facebook, Instagram and WhatsApp; it has since overtaken ChatGPT as the top free app on Apple's U.S. App Store, according to app-tracker Apptopia. Apptopia data cited by CoinDesk show nearly 3 million installs worldwide and almost 40% more iOS downloads in the U.S. and Canada than ChatGPT recorded in its own first 12 days on mobile.

Every query an AI agent handles runs on a server, and chipmakers rallied on the expectation that a mass-market agent translates into far more of them. AMD, which draws about 5% of its revenue from Meta, rose as much as 10% on Monday and briefly crossed $1 trillion in market value for the first time. Intel gained as much as 12% and Arm 14%, lifting the Philadelphia Semiconductor Index more than 4% in a fifth straight advance.

In Asia, Alibaba said Tuesday it is rolling out what it calls China's most powerful AI chip, an accelerator designed to compete with Nvidia, sending its Hong Kong shares higher alongside Tencent, which released a new image-generation model.