Bitcoin Blasts Above $85,000 as Short Squeeze Fueled Rally
Bitcoin's price surged above $85,000 on September 21, marking its biggest move since January. The surge came after Bitcoin logged its first weekly close above its 50-week moving average in 45 weeks. This technical move changed the market mood instantly.
The 50-week moving average is a key indicator that many traders watch, and crossing it can signal a shift from bear to bull markets. Galaxy Research noted that this was the first time Bitcoin closed above the average since January. Alex Thorn from Galaxy said that Bitcoin's recovery of the 50-week average has historically provided strong confirmation that bear-market lows were already in place.
The move above $85,000 also triggered a short squeeze, where traders who had bet against Bitcoin were forced to buy back into the market. This added fuel to the rally, with CoinGlass data showing about $756 million of leveraged crypto positions were liquidated over the preceding 24 hours, with short positions making up about $635 million of that total.