Bitcoin Tests $82K Recovery Threshold Amid Short Squeeze Fuelled Rally

Bitcoin's price has surged towards $80,000 as market sentiment shifted sharply from fear to greed. The rally follows a week where the cryptocurrency gained over 23% and has left many speculating whether it has already formed a cycle bottom.

Galaxy Research notes that Bitcoin needs to reclaim its 50-week moving average near $82,470 for stronger historical confirmation of a recovery. This metric has historically signaled a bear market bottom with an accuracy rate of 85%. According to Galaxy Research analysts, the 50-week MA has been the best signal for confirmation, noting that in 11 out of 13 instances where Bitcoin reclaimed it during completed bear markets, the bear-market low was in.

The current rally is also attributed to massive short liquidations in Binance futures. CryptoQuant analyst BorisD identified a large Binance futures short squeeze as the core reason for Bitcoin's recent advance. The short squeeze pressure value this week reached 6.94, the highest since November 2024, with over $2 billion in short positions being liquidated in the past two days.

However, the analyst warned that organic spot demand is necessary or Bitcoin will experience a major pullback once the short squeeze runs out of steam. The immediate technical challenge now sits above the recent $79,463 high, and Bitcoin needs to clear $80,000 before testing Galaxy's 50-week moving average near $82,470.