Bitcoin climbed above the USD 85,000 mark as renewed demand from exchange-traded funds and a wave of short covering pushed the world’s largest cryptocurrency to its highest level in months. The rally added fresh momentum to the crypto market after Bitcoin fell below USD 76,000 last week.
Bitcoin rose as much as 5% on Monday, reaching around USD 85,200 before giving back some of the gains. It was trading near USD 85,000 on Tuesday as buyers continued to support the move.
A key driver behind the rebound has been renewed demand through US spot Bitcoin ETFs. Data cited by market reports showed the funds attracted hundreds of millions of dollars in fresh inflows, reversing some of the withdrawals recorded earlier in the week.
US spot Bitcoin ETFs reportedly recorded around USD 435 million in net inflows on Friday, while combined inflows over September 17 and 18 were around USD 593 million. The return of institutional demand has provided additional support as Bitcoin attempts to hold above USD 80,000.
The move higher was also amplified as traders holding bearish positions rushed to close them after Bitcoin moved through key resistance levels. More than USD 445 million in crypto short positions were reportedly liquidated during the rally, adding further buying pressure.
Renewed spot demand and forced position closures helped Bitcoin move quickly through the USD 85,000 threshold. Analysts cited in market reports have pointed to the ability to sustain the move as an important factor for the next stage of trading.
The Bitcoin rally coincided with improving sentiment across broader financial markets. Falling oil prices and expectations surrounding upcoming US-China talks have supported risk appetite, while regulatory developments in the US have also influenced crypto sentiment.
Bitcoin's rise has also lifted other major cryptocurrencies. Ether gained more than 4% on Monday, while several other large digital assets also advanced.
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Despite the recent rebound, Bitcoin remains below the levels reached earlier this year. The cryptocurrency last traded above USD 85,000 in January, when it was considerably closer to the USD 97,000 range.
Market participants are now watching whether ETF demand can remain steady and whether Bitcoin can maintain its gains above recent resistance levels. Changes in interest rates, Treasury yields, the US dollar, and institutional flows could continue to influence cryptocurrency prices in the near term.