Bitcoin Breaks $84K as Short Squeeze Fuels Crypto Rally

Bitcoin surged above $84,000 on Monday, extending its breakout from September’s trading range as heavy short liquidations and rising derivatives activity fueled gains across the cryptocurrency market.

Bitcoin (BTC) traded around $84,984 during the late European morning, gaining 5.4% over 24 hours and moving comfortably above the Sept. 4 high of $82,284. The rally appears to be driven partly by forced buying as bearish traders unwind leveraged positions.

Crypto liquidations reached $746 million over the past 24 hours, according to Coinglass, with shorts accounting for $647.9 million. Bitcoin short liquidations totaled $277.5 million, while ether shorts contributed another $122.8 million. Nearly $160 million in positions were liquidated in just one hour, with roughly 95% involving shorts.

Despite the wave of liquidations, total crypto open interest climbed 7.59% to $156 billion, while 24-hour trading volume jumped 39% to $224 billion. The increase suggests traders are continuing to establish leveraged positions rather than reducing market exposure.

Bullish momentum was widespread, with 95 of the 100 assets in the CoinDesk 100 trading higher and the index gaining 3%. Futures data also strengthened, with the taker long-short volume ratio approaching 53% in favor of buyers. Bitcoin futures open interest surpassed 700,000 BTC for the first time in weeks.

Options traders are also showing stronger demand for bullish call positions in bitcoin and ether. Meanwhile, positive cumulative volume delta readings indicate aggressive market buying in both cryptocurrencies.

Altcoins joined the rally. Sui (SUI) climbed 21.4% over 24 hours, while Dogecoin gained 10.2% and Avalanche advanced 14.1%. AI-related cryptocurrencies also strengthened, with Fetch.ai’s FET rising 8.9% and Bittensor’s TAO gaining 7%.

However, elevated leverage remains a risk. Some perpetual funding rates have surged toward 60% annualized, signaling increasingly crowded long positions and raising the possibility of sharper volatility or a long squeeze if Bitcoin’s rally loses momentum.