Bitcoin hits $86,000 as analysts watch $90,000 and leverage builds

Bitcoin reached a fresh eight-month high of $86,000 on Monday. Analysts pointed to $90,000 as a potential next level to watch. About $750 million in bearish crypto derivative positions were liquidated as bitcoin cleared $82,000, a level that had capped prices since August, according to CoinGlass data. When short positions are liquidated, exchanges execute buy orders to close them, adding support to a rising market. Jim Ferraioli, Schwab's head of crypto research, said bitcoin was up 5% that morning because short perpetual futures contracts had been liquidated. Futures open interest, which measures the value of outstanding derivatives bets, rose faster than bitcoin's price. About $2 billion in new leveraged exposure has been added since the breakout, according to Coinalyze data. The data suggests traders are placing fresh leveraged bets even after short positions were eliminated. The rally has been fueled by renewed ETF demand and short covering, according to Nansen senior research analyst Nicolai Sondergaard. Crypto-native positioning has been slower to shift from bearish to bullish, Sondergaard said. ETF flows and spot demand could offer clues about whether the rally has staying power.