Bitcoin extended its breakout on Wednesday, climbing to as high as $97,800 during the U.S. trading session after finally breaching the $95,000 resistance that capped prices for much of the past two months.
The largest cryptocurrency gained 3.5% over the past 24 hours.
Meanwhile, the second largest cryptocurrency, Ethereum’s ether ETH$3,354.35, outpaced bitcoin's gains, rallying 5% to $3,380 — its highest price in over a month — and breaking through the key $3,300 level for the first time in 2026.
The synchronized breakout of the top two cryptocurrencies triggered widespread liquidations across derivatives markets, particularly among traders who had placed leveraged bets.
Nearly $700 million worth of leveraged short positions — bets on lower prices — were wiped out, according to CoinGlass. Of that, roughly $380 million were bitcoin shorts, while over $250 million came from traders shorting ether.
When traders put a bet on the decline of an asset's price, and if the price suddenly rises, a liquidation of a short position happens as those positions are automatically closed by the exchange or broker. This is particularly prominent in leveraged trading (such as futures or margin trading) when the trader's collateral, or margin, is insufficient to cover potential losses resulting from violent price movements against their bets.
"The break above the $95,000 triggered the liquidation of a meaningful pocket of short positioning, forcing [short] cover-driven demand," said Gabe Selby, head of research at CF Benchmarks.
However, the move might not be based on a fundamental shift as the price rally "appears largely mechanical, driven by market makers pushing prices higher to resolve residual supply-demand imbalances from the prior leg lower," referring to the rapid decline in October and November.
Bitcoin's climb above $95,000 was a crucial green light for the broader digital asset market to turn risk on, said Joel Kruger, market strategist at LMAX Group.
"This move has reawakened bullish momentum, with market participants now eyeing a potential climb above $100,000 and a possible retest of all-time highs, he said in a Wednesday note. "The broader crypto market is showing solid breadth, with several large-cap assets following bitcoin’s lead and posting robust gains as risk appetite returns."
Bitcoin's previous all-time high was $126,000 in early October of last year.
Kruger also pointed to support from traditional markets, where equities remain firm, and bond yields have stabilized, potentially helping fuel crypto’s upswing.
The breakout came with a spike in trading volumes, Kruger noted, suggesting that the rise is fueled by fresh demand. Meanwhile, funding rates across perpetual market swaps remained subdued, according to CoinGlass data, indicating that the price rise is not driven by speculative excess.
Still, the rally might have finally started to inject some much-needed bullish signal for crypto traders.
"A weekly close above $95,000 in bitcoin, or a break in ETH beyond $3,500, would provide an important confirmation signal for a renewed push higher," Kruger said.
Read more: U.S. bitcoin buyers are now driving price rally, reversing late 2025 trend