Key Highlights
- Bitcoin soared to $85,111 on Monday morning, marking a 5.7% increase within 24 hours.
- Brent crude oil prices fell to a half-month low, while the 10-year Treasury yield dipped below 5%.
- A total of $648 million in cryptocurrency short positions were liquidated in just one day.
Bitcoin reached a peak of $85,111 on Monday, reflecting a 5.7% rise over the previous day and breaking through a resistance level it had been testing for a week, according to CoinGecko data.
In the past week, Bitcoin managed to withstand a Federal Reserve interest rate hike, a Bank of Japan increase to a 31-year peak, and the Senate's rejection of the Clarity Act, without trading significantly below $75,000, noted Nexo analyst Iliya Kalchev in comments to Decrypt.
BitcoinBTC · USD$85,164+8.46%24H7D1M1YYTDSep 14Sep 16Sep 18Sep 19Sep 21$85.5k$82.1k$78.8k$75.5k24h HighHigh$85,37824h LowLow$80,414VolVol$2.1BMarket projectionsOdds by MyriadToday$84,000 to $86,000$84k–$86k71% chancePrice data by CoinGeckoCoinGeckoMore Bitcoin news and projections →External factors have eased recently, with Middle Eastern crude exports performing better than expected, resulting in Brent dropping to a half-month low. Additionally, traders are factoring in potential U.S.-Iran discussions at this week's UN General Assembly, while U.S. and Chinese officials met in New York to prepare for a Trump-Xi summit on September 24.
The bond market had a significant impact, as the 10-year Treasury yield reached 5.014% on September 14, its highest level since October 2023. This was influenced by oil prices and inflation rates that remain above the Fed's 2% target. Following the Fed's decision, yields declined across the board, with the 10-year yield nearing 4.93% and the 2-year at 4.67%, as investors viewed Warsh's focus on inflation as credible.
Tim Sun, a senior researcher at HashKey, stated, "This fully anticipated rate hike eliminated a degree of uncertainty," emphasizing that a clearer macroeconomic landscape is essential for Bitcoin's rise. He noted that most of the de-risking occurred prior to the Fed's decision and the Clarity Act vote, leading to a situation where investors tended to "sell the rumor, buy the news."
Myriad: Forecasting the next BTC all-time-high? Share your prediction.Liquidations and ETF Dynamics
Short sellers faced significant losses, with $648 million of $770 million in total liquidated positions coming from the short side, according to CoinGlass. Over $230 million in Bitcoin shorts were liquidated in a single session as prices surged past $80,000, according to Kalchev. Spot buying then broke through resistance at around $82,000, activating further stop-loss orders that propelled prices past $84,000, as noted by Sun. Bitcoin also regained its 50-week moving average during this period.
The pattern observed in August's rally mirrored this trend, where Bitcoin increased by 24.6% over five days, while active leverage declined by 12.6%. Short positions accounted for 89% of all liquidated funds during that time, as reported by Glassnode and Bybit.
Wallets that had been selling consistently throughout August transitioned to net buyers by the end of the month, Kalchev mentioned. By September 20, they began increasing their purchases at the fastest pace seen in weeks, with spot volumes shifting from net selling to net buying the day Bitcoin exceeded $80,000.
A Glassnode metric indicating the intensity of selling showed a spike in early September, but by September 20, it dropped to one of the lowest levels recorded, below where it was following the December 2022 selloff, which Kalchev interprets as sellers exhausting their supply.
Fund flows mirrored this behavior as well. Spot Bitcoin ETFs experienced a $746 million outflow across Tuesday and Wednesday, followed by a $592 million inflow on Thursday and Friday, resulting in a net gain of $6.2 million for the week, according to SoSoValue data. This represents the smallest weekly net inflow since their inception, succeeding a $462.7 million outflow the prior week.
Despite the recent surge, challenges for sustained growth remain. CoinShares' head of research, James Butterfill, highlighted on Friday that the most surprising aspect of the Fed's announcement was the removal of anticipated easing through 2027 from the dot plot, which bolsters the dollar and postpones the favorable liquidity conditions that Bitcoin typically responds to. He added that another rate hike this year "now looks increasingly plausible."
Bitcoin's upcoming challenges will involve various data releases that it cannot influence. The PCE report is due on September 30, job data on October 2, and CPI on October 14. Kalchev believes that cooling inflation and a stable labor market will be more crucial than any technical resistance level during this period.