Bitcoin pulled back from its eight-month high during Tuesday's Asian trading session, following a rapid ascent that saw the digital asset climb more than 13% within four days. The cryptocurrency eased to around $85,500 after touching $87,381 during US trading hours, though it still remains roughly $10,000 above last week's low. The token had joined a broad rally across risk assets such as equities, and has now recovered to levels last seen in late January, while staying well below the record high of $126,000 set in October.
The swift return above the $80,000 threshold has convinced traders that the bearish phase has concluded, with momentum now drawing sidelined capital back into the market, making the path of least resistance an upward one, according to Rich Rosenblum, co-founder of crypto market maker GSR. The risk, however, lies in the possibility that this move is essentially a macro liquidity trade wrapped in cryptocurrency clothing. If that proves to be the case, any volatility in broader risk assets would exert significant downward pressure on Bitcoin.
Mixed Signals Leave $84K as the Pivotal Price Point
The digital asset showed resilience against two headwinds from last week: a landmark US bill aimed at establishing a clearer regulatory framework for the industry failed to pass, and the Federal Reserve delivered its first interest rate hike in over three years. Sentiment got a boost on Thursday when the US Securities and Exchange Commission approved blockchain-based tokenized stocks for trading on American exchanges, causing related tokens to surge. Falling oil prices and optimism surrounding a potential US-China summit also lifted the broader market.
Data compiled by Coinglass shows that liquidations across long and short positions in digital assets have exceeded $1 billion over the past 24 hours, with short positions accounting for approximately $840 million of that total. The move appears to be more mechanical than conviction-driven, noted Rachael Lucas, an analyst at BTC Markets. Bitcoin broke through the September range high into a dense zone of short liquidations, with forced buying fueling the subsequent advance. The $84,000 level is the critical marker, she added, as it represents the breakout point and should now act as a floor if this rally signals a genuine shift in market structure rather than a mere short squeeze.
On the options trading platform Deribit, open interest in Bitcoin is dominated by call options, reflecting strong bullish sentiment. The platform shows nearly 320,000 contracts for the right to buy Bitcoin, compared with over 169,000 contracts for the right to sell, or puts. Additional tailwinds for Bitcoin include substantial inflows into US spot ETFs over the weekend and a fresh purchase of Bitcoin by Strategy (MSTR.US), the largest corporate holder of the cryptocurrency, marking its first buy in three weeks.
Yet headwinds remain unresolved: crude oil prices are hovering near the $100-per-barrel mark, and US Treasury yields, while off their highs, are still elevated. Meanwhile, Bitcoin remains below the $97,000 peak touched in mid-January 2026, and retail enthusiasm has yet to be rekindled, as AI stocks and other AI-related trades compete for the same pool of speculative capital. For much of this year, cryptocurrency was the forgotten macro trade, underperforming equities and gold while funds and attention flowed toward the AI trade, according to Rosenblum. What has changed is positioning rather than fundamentals, he noted, with Bitcoin having been underweighted and heavily skewed toward shorts.