Bitcoin Short Squeeze Sends Price Soaring Past $86,000

Bitcoin's price surged past $86,000 in a massive short squeeze that triggered over $454 million in liquidations within a 24-hour window. The rally brought the asset near its Jan. 1 opening price of $87,575 and trimmed year-to-date losses to under 2%. Market data show two waves of price action led to the record market capitalization of $1.72 trillion.

The first wave saw Bitcoin's price jump from $81,525 to over $85,250 within two hours, but a subsequent sell-off dragged it down to $81,150. However, the price quickly rebounded and climbed back above $85,000 less than two hours later.

The second surge pushed the price to a session high of $86,332 before retreating to strong support above $85,700. This represented a daily gain of approximately 6% and lifted Bitcoin's market capitalization to its highest level in months.