Bitcoin reaches $85,111 as $648 million in crypto shorts liquidated

Bitcoin climbed to a high of $85,111 on Monday, up 5.7% over 24 hours, according to CoinGecko data. The move took Bitcoin above a resistance band it had tested for a week. About $648 million of crypto short positions were liquidated in 24 hours. CoinGlass data showed that short positions accounted for $648 million of the $770 million liquidated across the market. More than $230 million of Bitcoin shorts were liquidated in one session as the price recovered through $80,000, analyst Iliya Kalchev told Decrypt. Kalchev said Bitcoin had absorbed a Federal Reserve rate hike, a Bank of Japan hike to a 31-year high and the Senate's rejection of the Clarity Act without trading meaningfully below $75,000. He said external pressure later eased as Middle Eastern crude exports held up better than forecast, Brent fell to a half-month low and traders priced in the prospect of US-Iran talks at that week's United Nations General Assembly. US and Chinese officials also met in New York to lay groundwork for a Trump-Xi summit on September 24. The 10-year Treasury yield reached 5.014% on September 14, its highest since October 2023, amid oil prices and inflation data that remained above the Federal Reserve's 2% target. The yield rose above 5% again on the day of the rate decision, then fell across the curve to about 4.93% for the 10-year note and 4.67% for the two-year note. Investors viewed Federal Reserve official Warsh's focus on inflation as credible, according to the report. Tim Sun, a senior researcher at HashKey, said the fully anticipated rate hike removed some uncertainty and that a clearer macroeconomic picture was necessary for Bitcoin to rise. Sun said most de-risking occurred before the Federal Reserve decision and the Clarity Act vote, creating what he described as a sell-the-rumor, buy-the-news setup. Sun said spot buying cleared resistance around $82,000 and triggered further stop-losses, whose forced buying carried Bitcoin through $84,000. Bitcoin also reclaimed its 50-week moving average. August's rally followed a similar pattern, with Bitcoin rising 24.6% over five days while active leverage fell 12.6%, according to a Glassnode and Bybit report. Short positions accounted for 89% of every liquidated dollar in that period. Kalchev said wallets that had sold steadily through August became net buyers by the end of the month and were adding Bitcoin at their fastest single-day pace in weeks by September 20. Spot volume changed from net selling to net buying on the day Bitcoin cleared $80,000. A Glassnode measure of selling pressure rose sharply in early September and had fallen by September 20 to one of its lowest readings on record. Kalchev said the reading was below its level after the December 2022 selloff and indicated that sellers were running out. Spot Bitcoin exchange-traded funds lost $746 million across Tuesday and Wednesday, then received $592 million across Thursday and Friday, according to SoSoValue data. They ended the week with a $6.2 million net inflow, their smallest weekly net inflow since launch, after recording a $462.7 million outflow the previous week. James Butterfill, head of research at CoinShares, said the Federal Reserve's bigger surprise was the removal of expected easing through 2027 from its dot plot. He said that change supports the dollar and delays the liquidity conditions to which Bitcoin responds. Butterfill wrote that another rate hike this year now appeared increasingly plausible. Kalchev expects cooling inflation and an intact labor market to matter more than any technical level. The relevant data releases are PCE on September 30, jobs data on October 2 and CPI on October 14.