Bitcoin rose to nearly $86,000, driving other major crypto assets higher. This market rally is primarily fueled by continued inflows into U.S. spot Bitcoin ETFs, a concentrated short squeeze, and expanding derivatives positions.
ETF fund inflows boost buying demand
The report noted that U.S. spot Bitcoin ETFs recently attracted nearly $1 billion in inflows. This additional capital directly strengthened buying pressure in the spot market and provided support for Bitcoin’s price at elevated levels.
As Bitcoin strengthens, major altcoins continue to gain momentum, leading to a broader rebound in market risk appetite.
Short liquidation amplifies the upward movement.
As prices continued to rise, the market saw large-scale short covering. Data shows that the total value of short liquidations reached approximately $920 million. Passive liquidations further increased buying demand, accelerating the upward momentum in a short period.
This type of market movement typically indicates that price increases are no longer driven solely by new capital, but also by forced liquidations of leveraged short positions.
Derivatives open interest rises to approximately $160 billion.
The open interest in crypto perpetual contracts has risen to approximately $160 billion, indicating increased trading activity and higher leverage participation. The rise in open interest typically reflects growing market bets on future price volatility.
During this rally, the total market capitalization of the crypto market briefly rose above $3 trillion for the first time since January, before retreating to approximately $2.95 trillion.
Whether Bitcoin can continue to maintain its strength will depend on whether spot ETF inflows persist and whether buying pressure in the spot market continues to follow suit.