Bitcoin breaking through $85,000, $648 million liquidated

What happened?

On Monday, the price of Bitcoin touched $85,111 according to data from CoinGecko and rose 5.7% in 24 hours, breaking through a resistance zone that had been repeatedly tested during the previous week.

According to CoinGlass, about $770 million worth of contract positions were cleared in the past 24 hours across all markets, with short position reaching a high of $648 million. Analyst Iliya Kalchev told Decrypt that just within one trading hour of price rallies crossing $80,000, more than $230 million was liquidated by liquidation .

It is worth noting that in the past week, Bitcoin has absorbed several gains such as a Fed rate hike, Japan raised interest rates to their highest level in 31 years, and United States Senate rejection of the Clarity Act, which never significantly fell below $75,000.

Why the macro-environment is shifting

External pressures have eased significantly recently. Middle East crude exports are better than expected, with Brent dropping to a half-month low; markets begin counting on the possibility of U.S.-Iran negotiations at this week's United Nations General Assembly; US and Chinese officials meet in New York paving the way for September 24 meeting between leaders from both countries.

Changes in the bond market were even more critical. On September 14, 10-year US Treasury yields touched 5.014%, a new high since October 2023; the resolution was published on that day again breaking 5%. Since then, all ten-year yields have fallen to about 4.93% and 2.67% respectively. Investors consider Warsh's expression of inflation credible.

HashKey senior researcher Tim Sun said: "This fully anticipated rate hike removes some of the uncertainty. He believes that a clearer macro picture is a necessary prerequisite for an increase in Bitcoin , and most risk-taking operations have been completed prior to votes on resolutions and bills, forming a pattern of purchases after expected cash flows".

Cash markets and capital flows

Sun noted that the spot buy cleared resistance near $82,000, triggering a further stop loss , forcing buy-ins to push prices through $84,000. The Bitcoin also rebounded on its 50-week average line.

Reports on Glassnode and Bybit show a similar pattern of gains in August: Bitcoin was up 24.6% over five days, while active leverage declined 12.6%, with 89% of the liquidated positions coming from short positions.

The on-chain data also supports this. Kalchev said that wallets sold continuously in August shifted to net purchases at the end of the month, with their fastest single-day growth rate for several weeks until September 20; prices broke $80,000 on that day and cash trading volume flipped from net selling to net buying. After surging in early September, the seller pressure indicator tracked by Glassnode fell to one of its historic lows on September 20, below levels seen after December 2022 sell-offs.

In terms of cash flow, according to SoSoValue data, Cash Bitcoin ETF net outflows were $746 million on Tuesdays and Wednesdays, $592 million on Thursdays and Fridays, and just $6.2 million for the week as a whole. This was the smallest single-week net inflow since the product went public, down from $462.7 million in the previous week.

Subsequent challenges remain

The pessimists are not without reason. James Butterfill, head of research at CoinShares, pointed out on Friday that the Fed's bigger surprise is that the PivotTable has removed its easing expectations until 2027, which supports the dollar and postpones the improvement in liquidity conditions relied upon by Bitcoin . He believes another rate hike within a year now looks increasingly likely.

The next test is the data calendar over which he has no control: PCE on September 30, employment figures on October 2, and CPI on October 14. Kalchev expects that cooling inflation and a robust labor market will be more important than any technology.