Bitcoin touched an eight-month high of $86,000 during Monday’s trading, extending its rally after breaking through the $82,000 resistance level. That ceiling had previously capped the leading cryptocurrency since August. Bitcoin’s sharp surge continued to brush off a series of macro headwinds from last week - ranging from the failed legislative vote on the CLARITY Act to the U.S. Federal Reserve’s rate hike paired with increasingly hawkish rhetoric.
The price rally above $82,000 triggered heavy losses for bearish traders in the derivatives market. Metrics from CoinGlass recorded $750 million in forced liquidations across crypto short positions right as the level was breached. “Bitcoin is up 5% this morning as perpetual futures shorts were liquidated,” said Schwab Head of Crypto Research Jim Ferraioli. The sharp rally followed earlier upward momentum, when Bitcoin crossed $85,000 alongside the liquidation of $648 million in short positions.
A $2 Billion Debt Pile Takes the Forefront
The liquidated bearish bets were swiftly replaced by an influx of $2 billion in leveraged exposure, according to tracking by Coinalyze. Derivatives traders immediately queued up fresh debt in the market right after the price broke resistance, causing open interest metrics to surge at a pace that outstripped the percentage gain in Bitcoin’s spot price.
“Price has turned bullish faster than positioning,” said Nansen analyst Nicolai Sondergaard. Sondergaard’s observations emphasize that the test of the $86,000 range still lacks full support from organic spot buying by asset holders.
ETF Investors Break Out of the Red
The trend reversal brought positive sentiment to institutional holders. The average cost basis across all U.S. spot Bitcoin ETFs now stands at $82,225. Today’s milestone puts these fund investors back into net profitability for the first time in several consecutive months.
Market attention is now shifting toward whether the rally has enough strength to test the key $90,000 psychological barrier. For daily price action, the $2 billion accumulation of leveraged positions presents ongoing downside risk. If organic spot demand dries up, the heavy debt load risks triggering a cascade of sudden liquidations that could punish top-buyers.
Reported by CoinDesk.
Read also: What Is Bitcoin Halving?
Previously: Bitcoin Breaks $85,000 After Weathering Three-Way Macro Storm - $648 Million in Shorts Wiped Out
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
