Bitcoin climbed above $85,000 after a wave of short-position liquidations helped drive its strongest advance since January.
The cryptocurrency rose by more than 5% in 24 hours to reach $85,193, according to CryptoSlate data, extending its gain over the past 35 days to about 29%. It had eased to $84,545 by press time after breaking through levels that had limited its recovery for much of the year.
The rally placed heavily leveraged bearish traders under pressure. CoinGlass reported that about $750.5m of leveraged crypto positions were liquidated during the period, including more than $648m, or roughly 86%, from short positions. About 137,386 traders were liquidated.
Bitcoin accounted for approximately $360m of those losses, while Ethereum contributed nearly $171m. The largest individual liquidation was an $11.29m BTC-USDT position on Binance.
Forced short-covering coincided with a sharp rise in aggressive buying across Bitcoin derivatives markets. CryptoQuant data showed net taker volume on Binance increasing from about $11m to $618m within an hour as European trading began, indicating a sudden shift towards market buyers.
CryptoQuant linked part of the move to improving geopolitical sentiment, with investors responding to signs of possible diplomatic progress between the US and Iran. Oil prices also fell as markets considered the prospect of talks, supporting a broader return to risk appetite despite continuing tensions in the region.
High levels of leverage added to Bitcoin’s volatility. Open interest stood at about $28.83bn, close to its May record, leaving a substantial number of derivatives positions vulnerable to further price swings.
That positioning could continue to support Bitcoin if prices rise and more short sellers are forced to close their trades. However, it also increases the risk of a sharper reversal. A loss of momentum could trigger rapid unwinding among leveraged long positions, turning the same market mechanics that fuelled the rally into a source of selling pressure.
Bitcoin moves above key long-term indicators
Bitcoin also moved through technical thresholds that traders have been monitoring as possible evidence that the downturn is ending.
It closed above its 50-week moving average last week for the first time since November 2025, ending a 45-week period below the measure. Alex Thorn, Head of Firmwide Research at Galaxy Digital, said previous recoveries above the average had often confirmed that Bitcoin had already found its bear-market low.
The indicator has not always been reliable. Galaxy research shows Bitcoin has reclaimed the 50-week average before falling below it again, including during the 2021-2022 bear market.
Bitcoin also moved back above its 365-day moving average, near $83,000. CryptoQuant Chief Executive Ki Young Ju said maintaining that level could encourage momentum traders and institutional investors who had stayed out of the market during the decline to return.
Bitcoin analyst Joe Consorti said the market was tentatively entering a “bull market”.
But the price breakout has not been matched by similar growth in network activity. Santiment said new and active Bitcoin addresses remained close to their median levels between July 24 and Sept. 20. Social activity rose to 1.23 times its baseline, while transactions worth more than $100,000 reached 1.18 times normal levels, but neither figure was a two-month high.
During Bitcoin’s Aug. 21 rally, when its price increased almost 7%, wallet activity was stronger despite a less significant technical breakout. New addresses reached 1.07 times their baseline and active addresses rose to 1.14 times.
Santiment said 10 weekdays in the previous two months had produced more new wallets than the latest Sept. 18 breakout session.
Derivatives activity has been considerably stronger: open interest rose by about 9% on Sept. 18 and remained elevated. The divergence means the rally’s durability will increasingly depend on fresh spot-market demand. Forced buying can push Bitcoin through resistance, but its effect fades as short positions are cleared. Holding above $85,000 will require new capital to replace traders forced to buy back losing positions.
