Bitcoin Surges Past $85,000 as Short Squeeze Forces Traders to Close Positions

Bitcoin surged past $85,000 on Monday, marking its strongest level since earlier this year. The cryptocurrency's price climbed about 5% over 24 hours to reach around $84,984 in late European morning trading.

The sharp short squeeze forced traders who had bet on further declines to close their positions, resulting in a massive liquidation of $647.9 million in short positions. Bitcoin shorts accounted for $277.5 million of the liquidations, while Ether shorts represented another $122.8 million.

Market activity increased sharply, with open interest rising 7.59% to $156 billion and 24-hour trading volume increasing 39% to $224 billion. This suggests that traders were replacing liquidated positions rather than leaving the market.