Bitcoin extended its strong recovery on Monday, climbing above $87,000 to reach an eight-month high as a broader risk-on move across global markets boosted appetite for cryptocurrencies.
The world's largest cryptocurrency has gained sharply in recent sessions, supported by renewed institutional demand, fresh inflows into spot Bitcoin exchange-traded funds (ETFs), lower crude oil prices and a wave of short liquidations in the derivatives market.
Bitcoin's latest move also came despite recent market setbacks, including a Federal Reserve rate hike and the failure of the CLARITY Act to advance in the US Senate. Market participants have instead focused on continued regulatory activity from US agencies and improving risk sentiment.
What is driving Bitcoin's latest rally?
Prateek Gupta, head of business at Mudrex, said Bitcoin's rise above $87,000 followed a broad risk-on move in equities and cryptocurrencies after the US Federal Reserve's tone was perceived as more dovish than expected.
Falling oil prices, driven partly by diplomatic signals involving the US, Iran and China, have also eased inflation concerns and supported risk appetite, Gupta said.
The rally has been further amplified by the unwinding of bearish bets. More than $1 billion worth of cryptocurrency positions were liquidated over 24 hours, according to Mudrex.
Other market data put the scale of the Bitcoin short squeeze at more than $550 million, while overall crypto short liquidations were close to $920 million.
Bitcoin is now up about 44% for the quarter, according to Mudrex, putting it on track for its strongest quarterly performance since the fourth quarter of 2024.
The cryptocurrency had traded below $75,000 earlier in the month before recovering sharply and breaking through the $82,000 resistance level.
Strategy and Strive add more Bitcoin
Corporate buying has provided another source of support for the rally.
Strategy, the world's largest corporate holder of Bitcoin, bought another 950 BTC for about $75.7 million. The purchase took its total holdings to 846,000 BTC, with the latest coins acquired at an average price of $79,670.
The purchase marked Strategy's return to Bitcoin accumulation after a pause. The company also spent about $174 million repurchasing its STRC preferred shares.
Strive also added substantially to its Bitcoin treasury, buying 1,355 BTC for about $107.7 million and taking its total holdings to 26,355 BTC. The company paid an average of roughly $79,475 per Bitcoin for the latest purchase.
Together, Strategy and Strive bought 2,305 BTC last week for approximately $182.7 million.
The fresh corporate purchases come as Bitcoin treasury companies continue to accumulate the cryptocurrency despite recent regulatory and monetary-policy headwinds.
ETF inflows provide another boost
Demand from spot Bitcoin ETFs has also strengthened.
Spot Bitcoin ETFs recorded roughly $435 million in net inflows on Friday, according to market data cited in recent reports. Another estimate from Delta Exchange put the figure at nearly $617 million.
JPMorgan data cited by the Wall Street Journal put Friday's ETF inflows at about $433 million.
Binance Research said Bitcoin had absorbed the recent Fed rate hike and the setback to the CLARITY Act, with investors reassessing how damaging those developments would ultimately be.
The research note said the Fed's focus on inflation may have reduced concerns about unchecked price pressures, while easing oil supply concerns provided additional support.
Binance Research also pointed to continued regulatory activity, including SEC rulemaking and a CFTC proposal submitted for White House review, as factors partly offsetting the CLARITY Act setback.
Short positions add momentum
The derivatives market has played an important role in accelerating Bitcoin's advance.
CoinSwitch said Bitcoin extended its rally above $87,000 after breaking through the $82,000 resistance level, with roughly $750 million in short positions liquidated as bearish trades were squeezed out.
ETF flows turning positive have supported the move, while futures open interest has increased by around $2 billion, suggesting that fresh leverage is entering the market.
Mudrex's estimate of more than $1 billion in total crypto liquidations over 24 hours similarly highlights the impact of leveraged positions.
The increase in futures open interest could keep volatility elevated if Bitcoin's rally loses momentum, as a larger amount of leverage would remain exposed to price movements.
Traders watch $89,500 and $92,000
The latest move has also improved Bitcoin's technical setup.
Mudrex identifies $89,500 as an immediate resistance level, while $82,000 remains an important support zone.
CoinSwitch said traders are watching the $87,000 to $90,000 range, with the sustainability of spot demand likely to become increasingly important as leverage rises.
Piyush Walke, derivatives research analyst at Delta Exchange, said Bitcoin ETFs had recorded nearly $617 million in inflows, providing an additional tailwind to the rally.
Walke also pointed to a golden cross that has accompanied Bitcoin's September 2026 rally. The technical signal occurs when the 50-day moving average moves above the 200-day moving average.
According to Walke, the $92,000 to $93,000 area represents the next major supply zone.
Ethereum holds above key support
Ethereum has also maintained a strong technical structure during the broader cryptocurrency recovery.
ETH was trading around $2,750 after breaking above the $2,550 resistance level, Walke said.
The cryptocurrency remains above its major exponential moving averages, while its relative strength index (RSI) is around 70, signalling strong momentum.
Following the breakout, $2,550 has emerged as the key support level to watch for Ethereum.
The broader crypto market's performance will now depend partly on whether institutional and spot-market demand can sustain the latest advance, particularly as elevated futures leverage leaves prices vulnerable to sharper moves in either direction.