Bitcoin price climbed above $87,000 on Monday, gaining approximately 7% over 24 hours and reaching its highest level since January. The rally was driven by a combination of factors: a broad short squeeze that liquidated $919 million in crypto short positions, including $557 million in Bitcoin shorts, alongside improved risk sentiment stemming from the Trump administration's proposed $5 billion Gulf reconstruction investment.
The proposal aims to rebuild Middle East energy infrastructure damaged during the seven-month Iran war. The fund would seek matching contributions from Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, Oman, Iraq, and Jordan, with a focus on alternative oil and gas transport routes to reduce reliance on the Strait of Hormuz.
Market conditions favored broader risk assets during the session. Lower oil prices and reduced Treasury yields supported the rally, while spot Bitcoin ETF inflows added buying pressure as leveraged short positions were forced to close at resistance levels.
Analyst Michaël van de Poppe identified $90,000 to $91,000 as the next resistance zone to monitor, with stronger momentum potentially extending toward $98,000 to $100,000. Prediction market traders have assigned a 42% probability to Bitcoin reaching $100,000 before the end of 2026.
Despite the liquidation wave, leverage remains elevated as traders continue adding exposure. Open interest increased 7.6% to approximately $156 billion. Market data from Glassnode indicated Bitcoin held above its true market mean and short-term holder cost basis, levels historically associated with stronger market regimes. However, rising on-chain FOMO metrics suggest fresh leverage positioning could amplify volatility near key resistance zones.
