Bitcoin's price has decisively broken through the $85,000 threshold, marking its strongest one-way rally since January of this year, driven primarily by improved geopolitical conditions following US-Iran diplomatic progress and the resulting forced liquidation of substantial short positions. The resurgence of market risk appetite combined with intense leveraged capital competition forms the core momentum behind this price surge.
From a market microstructure perspective, the price movement reflects a massive redistribution of capital. According to CryptoSlate data, Bitcoin rose over 5% in the past 24 hours, reaching $84,545, with cumulative gains of approximately 29% over the last 35 days. Data compiled by Woofun AI shows that CoinGlass monitored total liquidations of $750.5 million within 24 hours, of which $648 million—or 86%—were short positions being wiped out, involving 137,386 traders. BTC liquidations reached approximately $360 million, ETH around $171 million, with the single largest liquidation on the Binance platform hitting $11.29 million.
Meanwhile, CryptoQuant data reveals that net buying volume on Binance surged from $11 million to $618 million within a single hour, indicating a sudden imbalance in buying power. Current open interest stands at approximately $28.83 billion, approaching May's record, with the high-leverage environment further amplifying price volatility.
Technical analysis indicates that Bitcoin has broken through the resistance level that had been suppressing its rebound, and last week crossed above the 50-week moving average for the first time since November 2025, ending a 45-week stretch of trading below that indicator. Alex Thorn, Head of Firmwide Research at Galaxy Digital (NASDAQ: GLXY), pointed out that returning to this moving average typically signals a bear market bottom, though the 2021-2022 historical precedent demonstrates this signal is not entirely reliable. CryptoQuant CEO Kaiyang Zhu emphasized the supporting role of the 365-day moving average, suggesting that holding above this level could attract momentum traders and institutional participation. Bitcoin analyst Joe Consorti has assessed that the market is in the initial phase of a "bull market," though this view still requires subsequent capital flows for confirmation.
However, contrasting on-chain data reveals potential risks. Santiment data shows that new addresses and active addresses are only at levels seen between July 24 and September 20, with social activity volume at 1.23 times normal and transactions above $100,000 at 1.18 times normal—none reaching two-month highs. By comparison, when BTC rose nearly 7% on August 21, new addresses and active addresses reached 1.07 times and 1.14 times normal levels respectively, and over the past two months, 10 business days saw new wallet creation exceeding that of the September 18 breakout. Open interest grew approximately 9% on September 18, highlighting that derivatives activity far outpaces network fundamentals. The sustainability of this rally depends on fresh spot demand—as short-covering strength diminishes, new capital must step in to replace it in order to maintain support above the $85,000 level.