Bitcoin Surges Near $80K as Short Squeeze Fuels Rally

Short Squeeze Drove the Rally

Bitcoin rose 2% on Monday and traded near $80,000, its highest price since May. Ether followed, climbing 2% to around $2,500, a level it had not touched since January.

The bigger move happened just before Monday. Bitcoin jumped more than 20% in three days, the strongest 3-day rally since 2023.

The fuel was a short squeeze. A short seller is someone who bets that a price will fall, and when the price goes up instead, that trader has to buy it back. All those forced buys can push the price even higher.

As prices rose, more than $4 billion worth of short positions were liquidated, forcing traders to buy back and pushing the rally even higher. That means losing bets were closed automatically, which adds even more buying pressure to the rally.

Bitcoin's rally tempts you to chase, but a steadier path is the free Always Be Buying E-Book

Jonathan Krinsky, a strategist, said, "This pattern looks familiar." A similar move happened in January 2023, but that rally faded and bitcoin fell back to its 200-day moving average. That average is simply the price over the past 200 trading days, and many investors use it as a basic health check for the trend.

Treasury Policy Helped the Move