Why is Bitcoin price stuck below $80K after its explosive rally?

Bitcoin was trading around $77,000, holding last week’s explosive gains but below $80,000.

The cryptocurrency surged more than 20% last week and reached roughly $79,500 on Friday, its highest level in about three months.

The rally reflected Treasury bond buybacks, a weaker dollar, ETF demand, regulatory optimism and a historic short squeeze.

But the market now faces a different test. The forced buying that powered the first leg is fading, leaving Bitcoin dependent on sustained institutional demand and friendlier rates.

Short squeeze got Bitcoin here, but that fuel is fading

More than $4.3 billion in bearish crypto positions were liquidated from Wednesday onwards as prices jumped. Short sellers were forced to buy back positions as prices rose, adding fuel to the move.

That mechanism cannot continue indefinitely.

MEXC Research chief analyst Shawn Young told The Block that the Treasury had “opened a pressure valve,” but crypto markets priced the intervention like a much broader change in monetary conditions.

He argued that the bond move forced shorts out faster than it improved Bitcoin’s underlying macro case.

Zeus Research analyst Dominick John made a similar point. Once crowded short positions are cleared, he told The Block, the rally must stand on its own through fresh spot demand, liquidity and stronger fundamentals.