Bitcoin Defies Bears at $87,000 as Short Squeeze Creates Price Rally
Bitcoin's price has surged to $87,000, its highest level in eight months, despite several bearish catalysts that were expected to break the rally. The CLARITY Act, which aimed to provide federal market structure rules for crypto, failed on the Senate floor by a single vote. This was followed by a 25 basis point rate hike from the Federal Reserve and a warning from Anthropic's Dario Amodei about the AI trade.
Roughly $1 billion in positions were liquidated in a single 24-hour stretch, with 84% of that coming from short positions. This created a cascade effect, where leveraged short positions were force-closed, pushing prices up and triggering further shorts. One wallet reportedly lost $32.5 million after being liquidated four separate times within 14 hours.
The failure of the CLARITY Act and the rate hike had little impact on institutional buying, with Strategy disclosing a purchase of 950 BTC for $75 million during this time. US spot Bitcoin ETFs saw heavy redemptions but then pulled in funds just three sessions later. Total futures open interest actually rose 7.5% to roughly $156 billion.