Bitcoin staged a genuine rally on Monday, rapidly breaking above $87,000 and peaking at $87,381 during the U.S. session — the highest level since late January. Although the coin corrected to about $85,500 at the start of Asian trading on Tuesday, the surge completed a 13% advance over four days and pushed total crypto market capitalization back above the symbolic $3 trillion mark — for the first time this year. But what underlies this bullish triumph: real fundamentals or merely technical inevitability?
The immediate fuel for the rocket was a massive wave of forced liquidations. According to Coinglass data cited by CoinDesk, more than $1 billion of leveraged crypto positions were wiped out in 24 hours.
Bears took the brunt: about 82% of liquidated volume (roughly $840 million) came from short sellers. Some 135,000 traders were forced to lock in losses. The most painful hit was a nearly $21 million Bitcoin liquidation on the Hyperliquid platform.
"It looks like mechanics did it rather than conviction. Bitcoin pierced the upper boundary of its September range and entered a dense zone of short-liquidation levels, and forced buying finished the rest," notes Rachel Lucas, an analyst at BTC Markets.
She adds that $84,000 has now become a critical support level. It will show "whether this is a genuine trend reversal or just a short squeeze." However, blaming everything on a mechanical squeeze would be a mistake. The market also caught a powerful macroeconomic and regulatory tailwind:
Spot Bitcoin ETFs in the U.S. drew about $1 billion on Monday — the largest single-day inflow since October.
Last Thursday, the regulator granted a five-year exemption allowing trading of tokenized U.S. equities on blockchain platforms. That sparked euphoria among crypto-related companies: Coinbase shares rose 3.5%, and MicroStrategy gained 9.5%.
WTI fell more than 2%, dipping below $90/bbl on news that Iran may be willing to reopen the Strait of Hormuz. Cheaper oil reduced inflation fears and reignited risk appetite.
The Nasdaq Composite closed Monday at a record high.
MicroStrategy resumed Bitcoin buying for the first time in three weeks, acquiring 950 BTC for $75.7 million. Their treasury now holds a colossal 846,000 BTC.
The rally lifted the entire market. Ethereum neared a 10-month high at $2,800, XRP gained over 9%, Dogecoin jumped 15%, and meme-coin PEPE led the pack with a 22% rise. The Fear & Greed Index moved into "Extreme Greed."
Open interest in perpetual futures swelled to nearly $160 billion (a peak since late October), despite the short-covering purge. New leveraged positions are actively replacing the old ones.
Experts warn the market is walking a tightrope. Caleb Lin, senior trader at QCP Group, notes that when "leverage outpaces spot prices," even a small pullback can trigger a cascade of liquidations in the opposite direction.
Despite the euphoria, Bitcoin remains far below its all-time high of $126,000 set in October last year. Several analysts urge calm.
"Risk is that this is macro-liquidity trading dressed up as crypto. If so, the slightest wobble in risk assets will put significant pressure on Bitcoin," warns Rich Rosenblum, co-founder of crypto market-maker GSR. Blockchain analytics firm Santiment echoes the concern, recording that optimistic social-media commentary has reached its highest level since 2024.
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