Bitcoin reached $87,400 on Monday, marking its highest price in eight months, despite a week marked by negative macroeconomic developments and regulatory setbacks.
The cryptocurrency's sharp ascent came after the US Federal Reserve raised interest rates for the first time in over three years, which initially sent bitcoin to a three-week low of $75,000. The Senate also voted against advancing the CLARITY Act, a key crypto market structure bill, adding to the week's headwinds. Escalating geopolitical tensions in the Middle East and Ukraine also weighed on risk assets.
ETF Inflows and Technical Factors Drive Rally
Data showed $998.95 million flowed into spot bitcoin ETFs on Monday alone, marking the strongest single day in nearly a year. This represented the primary driver of the price surge.
Technical analysis revealed additional factors amplifying the move. Over $340 million in short positions were liquidated in what analysts characterized as a classic short squeeze. With minimal historical trading activity between $80,000 and $85,000, bitcoin encountered little resistance on the way up, allowing rapid price appreciation.
Sustainability Questions Remain
Bitcoin now faces major resistance levels at $85,000 and $95,000. Analysts noted that continued ETF inflows would be necessary to break through these barriers. However, the Coinbase Premium Gap—a measure of US spot demand—has turned negative, suggesting demand from US traders may be cooling. Further ETF performance in US trading sessions will be critical to determining whether the rally can sustain.
