Key highlights:
Bitcoin climbed above $85,000 on Monday, reaching its highest level in eight months as the cryptocurrency extended a sharp recovery from last week’s lows. The rally came as short liquidations, renewed spot ETF demand and improving risk sentiment combined to push BTC through the $80,000 resistance zone.
Bitcoin powers through $85,000
According to CoinCodex data, the Bitcoin price reached an intraday high of $85,438 on September 21, marking its first move above $85,000 since January. Bitcoin gained over 5% over the last 24 hours to reach the milestone, setting the pace for the rest of the cryptocurrency markets.
The breakout above the $85,000 mark extends Bitcoin’s recovery from its recent lows after its bullish run in August. BTC had previously struggled around the $80,000 area, with Glassnode identifying a major resistance at the $83K to $86K mark.
Several factors account for the overnight price spurt for Bitcoin. Right off the bat, a large wave of short liquidations triggered the move higher for the premier cryptocurrency. According to Coinglass data, more than $780 million in crypto positions were liquidated over 24 hours, with short positions accounting for most of the forced closures. $431 million in short positions was liquidated in Bitcoin-linked futures alone.
Crypto futures liquidations over the past 24 hours. Source: Coinglass
As Bitcoin moved higher, traders betting on further declines were forced to close their positions by buying BTC. The buying added upward pressure and triggered further liquidations, creating the conditions for a short squeeze.
The move also followed renewed demand for US spot Bitcoin ETFs. The funds recorded $433 million in net inflows on Friday after heavy outflows earlier in the week.
Regulatory optimism fuels rally
Bitcoin’s latest rally came amid a shifting US regulatory backdrop. Last week, the SEC introduced a five-year exemption for platforms trading tokenized stocks and securities on blockchain networks, sparking a bullish reaction from the market.
Furthermore, new proposals from the CFTC have also improved sentiment across digital assets after the US failed to advance the CLARITY Act.
The broader market environment has provided another tailwind for cryptocurrency prices. Oil prices declined on Monday, easing some pressure on Treasury yields, while US equities moved higher as investors returned to technology and AI stocks.
A bird’s-eye view reveals that the bullish wave extended beyond BTC. Ethereum logged a 6% gain over the last day, while BNB and XRP gained 5% and 7%, respectively.
Zcash, trading at $1,548, raked in a respectable 7% surge over the last 24 hours, while Hyperliquid pulled in a 5% surge. Dogecoin and Cardano both surged by 10% on Monday, with NEAR logging 16% in the same window.
Source:: Bitcoin Surges Above $85,000 as Short Squeeze Fuels Eight-Month High