Bitcoin Stays Above $86K After Two Strong Sessions

Bitcoin has just held above $86,000 this Tuesday, after many weeks of strong progress supported by the return of appetite for risk. Various observers see in this scenario the end of “crypto winter”, however, short position liquidations and monetary uncertainties still call for caution.

Four signals support Bitcoin’s recovery

Bitcoin gained more than 5% last Friday, then nearly 6% this Monday, before managing to retain most of its gains. Its price crossed $86,000, a level it had not reached since the end of January.

Sean Farrell, head of digital assets at Fundstrat, believes the breakout is strong enough to indicate a cycle change. He states:

I think crypto winter is over, even if the rise will not necessarily be linear.

Many elements currently consolidate this bullish reading :

• Bitcoin has surpassed its 50-day moving average, an indicator followed to measure intermediate trends ;
• The price reached $86,000 after trading below $80,000 for much of the year ;
• Demand for spot Bitcoin ETFs has rebounded after several periods of outflows ;
• Total crypto market capitalization reached $2,940 billion this Monday.

However, this last figure remains nearly 30% below the October 2025 record. Moreover, Bitcoin continues to trade far from its all-time high above $125,000. The rebound therefore erases part of the bear market, without bringing valuations back to their previous records.

ETFs and liquidations fuel the rise

According to Nicolai Sondergaard, analyst at Nansen, the recovery mainly results from a combination of the return of demand for ETFs and a major short squeeze. Such a mechanism occurs when traders who bet on a correction must quickly buy back Bitcoin to close their positions.

These forced buybacks contribute to creating additional demand. They can sharply accelerate this rise. Thus, passing several resistance levels triggered a cascade of liquidations among short positions. This phenomenon explains part of the speed of this movement, however, it does not guarantee that the progress can continue at the same pace.

However, this increase benefits from broad support. Altcoins have also moved after the Securities and Exchange Commission’s decision to grant a five-year exemption to certain tokenized stock trading activities. Such a measure has strengthened optimism around blockchain infrastructures, primarily Ethereum and Solana.

The market even withstood the failure of the CLARITY Act in the Senate. Indeed, this bill was expected to provide a federal framework for cryptos. Its blockage could have triggered a drop, but investors still seem to bet on clearer standards directly established by regulatory agencies.

Monetary policy remains the main risk

In August, Bitcoin had already surged nearly 25%. This increase followed multiple U.S. Treasury interventions in the bond market and in favor of the yen. Wall Street interpreted such operations as an attempt to limit the rise of yields, favorable to risky assets.

The recent correction in oil prices has also improved the market climate. Cheaper oil reduces inflation fears and slows the rise of bond yields. Thus, Bitcoin has benefited from the same return of appetite for risk as technology stocks.

Yet, the Federal Reserve has just raised its rates, and markets had assessed a 56% probability of a new increase before the end of this year. A resurgence in inflation or a rise in yields would thus weigh on crypto demand.

Breaking the 50-day moving average confirms a technical improvement, however it does not eliminate macroeconomic risk. For a lasting validation of the end of crypto winter, Bitcoin will need to maintain the $80,000 threshold, attract regular flows toward ETFs, and trade without relying exclusively on short seller liquidations.