Bitcoin climbs above $80,000 after $4bn short squeeze

Bitcoin moved past $80,000 on Tuesday, according to Mettis Global, and was last quoted 2.5 per cent higher at $80,785. The advance came after a rally of more than 20 per cent over just three days, its best three-session run since 2023. CNBC linked part of that surge to a short squeeze that forced the closure of more than $4bn in bearish crypto bets.

Demand for riskier assets picked up after the U.S. Treasury said it would double its purchases of longer-dated government bonds, a step that briefly pushed yields lower. Spot bitcoin exchange-traded funds in the United States took in net inflows of $1.92bn last week, their strongest week since October. Ether climbed 1.17 per cent to $2,498, while XRP rose 2.6 per cent to $1.52 and has gained roughly 50 per cent over seven days, based on CoinGecko data.

Opinions on durability are mixed. BTIG noted that a comparable January 2023 rally faded at first before bitcoin eventually held near its 200-day moving average, while Fundstrat believes the present rebound could last longer, citing ETF flows, higher trading and rising stablecoin issuance. Fundstrat also observed that the rally came without fresh buying from Strategy, the largest corporate bitcoin holder, which has made no additions for two weeks, and a resumption of its purchases could add support.