Bitcoin hits $85,000 as short squeeze forces out $648 million of bearish bets

Bitcoin

extended its break above the top of its September range on Monday, trading at $84,984 in the late European morning, a gain of 5.4% over 24 hours that leaves it well clear of the $82,284 high of Sept. 4.

The move is being driven by forced buying more than fresh conviction, with $746 million of positions liquidated over 24 hours, of which $647.9 million were shorts, and a further $159.9 million in the past hour alone, 95% of that on the short side. Bitcoin shorts accounted for $277.5 million of the 24-hour total and ether shorts $122.8 million, on Coinglass figures.

Open interest across the market has risen 7.59% to $156 billion even as those shorts were closed out, and 24-hour volume is up 39% at $224 billion, a combination that suggests traders are replacing the positions being liquidated rather than stepping back.

A total of 95 of the 100 CoinDesk 100 (CD100) constituents are higher on the day and the index up 3.0%, though the composition has flipped from Friday, when small caps and decentralized finance (DeFi) tokens did the running. Macro has steadied rather than turned, Brent crude at $101.97 and flat on the day after touching $108 in mid-September, while gold slipped 0.65% to $4,350 and silver 0.32% to $66.24.

Derivatives positioning

• Bullish flow: For the first time in weeks, the taker long-short volume ratio in crypto futures market is leaning nearly 53% in favor of the bulls. In other words, buyers are now driving more inflow, which is consistent with the bullish price action in the market.
• Bitcoin’s OI increases: Bitcoin’s total futures open interest (OI) has topped 700K $BTC for the first time in weeks. Though this is still considerably short of record highs, the upswing points to increased demand for leverage as the spot price rally gathers pace.
• Bullish whale positioning: On Binance, signals are mixed. The exchange’s whale account long/short ratio is hovering around 1.0, indicating that whales are executing market orders at an equal buy-and-sell pace without driving immediate intraday price momentum. However, the overall whale derivatives position ratio sits above 2.0, signaling that large accounts are structurally holding massive, leveraged long exposure and positioning for a major move up.
• Record OI in $CRO: Open interest (OI) is climbing across multiple tokens, but $CRO is completely decoupling from the pack. Futures open interest tied to $CRO has surged to a record high of 536 million tokens, validating the asset's aggressive price gains.However, danger is flashing in the derivatives data. Annualized perpetual funding rates have spiked to nearly 60%, signalling that long positions are heavily overcrowded. When funding costs hit these unsustainable extremes, the market structurally primes itself for heightened volatility and a potential long squeeze.
• Positive CVDs: Speaking of the 24-hour cumulative volume delta (CVD), bitcoin and ether have the highest readings among the top 20 coins. The positive reading shows that the buy-side flow is more aggressive and is being executed at market orders rather than passive limit orders.
• Vol indices rise slightly: Both bitcoin and ether’s 30-day implied volatility indices, BVIV and EVIV, show a slight uptick but nothing out of the ordinary. It shows that traders expect an orderly rally.
• Calls in demand: In the Deribit-listed options market, traders continue to chase upside via calls or bullish bets in both ether and bitcoin, 24-hour volume rankings show. A large call spread in ether crossed the tape via Paradigm early today.