Bitcoin Soars to $81,000 as Short Squeeze Reaches Extreme Levels

Crypto's short squeeze has reached extreme levels as Bitcoin (BTC) surged to $81,000 in less than a week, wiping out billions of dollars in bearish positions. The rally was fueled by a sudden improvement in the macro environment, with the U.S. Treasury doubling its liquidity-support buybacks for longer-dated Treasury securities.

The move has created a positive feedback loop, where rising prices trigger short liquidations that fuel further price increases. However, this situation is unsustainable and poses significant risks to the market.

Despite the extreme levels of momentum indicators, the technical outlook is improving. Bitcoin has closed above its 50-week exponential moving average for the first time since November 2025, and spot ETF inflows have reached $1.92 billion, indicating actual demand for Bitcoin.