Bitcoin continues to show impressive strength, soaring from around $85,000 to over $91,000 within 24 hours—a 6% gain that has added roughly $140 billion to its market capitalization. This surge has significantly boosted the balance sheets of Bitcoin-holding companies, miners, and large investment funds.
The strong recovery of the leading cryptocurrency is drawing attention, and here are the three main factors driving this rally.
3 Main Factors Driving Bitcoin’s Price Surge
1. Broadly Improving Market Sentiment
Positive sentiment is returning across risk assets. Tech stocks rebounded, the 10-year U.S. Treasury yield fell, and overall crypto market capitalization rose over 5% in the past 24 hours.
As the market leader, Bitcoin reacts strongly to macro developments and institutional capital flows, making its price highly sensitive to investor sentiment.
2. Over $165 Million in Short Positions Liquidated
Data from perpetual futures contracts shows more than $165 million in short positions were liquidated in the past 24 hours.
This “short squeeze” occurs when bearish traders are forced to cover positions, pushing Bitcoin’s price up sharply and accelerating the rally.
3. Strong Inflows into Spot Bitcoin ETFs
Spot Bitcoin ETFs now hold a total of $125 billion in net assets, indicating that significant capital is ready to flow into Bitcoin if the upward trend continues.
This serves as a strong signal that Bitcoin still has room to rise in the short term.
What Investors Should Watch
Given the market’s ongoing volatility driven by macro events and derivative activity, investors should remain cautious. While the current momentum may continue if positive sentiment and capital inflows persist, the risk of pullbacks remains.
