&imwidth=800&imheight=600&format=webp&quality=medium "Bitcoin surges above $85,000 as nearly $900 million in crypto positions are liquidated: Is the crypto winter over?")
Bitcoin is back above $85,000 but the bigger question is whether this is the beginning of a lasting crypto recovery.
The world's largest cryptocurrency briefly crossed $85,000 on Monday, reaching its highest level since January and gaining more than 5% in 24 hours. The move came alongside a huge wave of forced liquidations, with more than $750 million in crypto positions wiped out over the same period. Most were short positions betting that prices would fall. The rally has pushed Bitcoin sharply higher from its recent September lows around $75,000. But calling it a confirmed new bull market would be premature. The latest move is being driven partly by a short squeeze, alongside changing macroeconomic conditions and renewed buying.
Why is Bitcoin suddenly rising?
A major trigger has been the clearing of resistance around the $82,000-$85,000 area. As Bitcoin moved higher, traders betting against it were forced to close their positions. That meant exchanges automatically bought Bitcoin to cover those trades, creating more upward pressure.
CoinGlass data showed roughly $648 million of short positions were liquidated in 24 hours, according to The Block. Bitcoin accounted for about $361 million of those liquidations.
That creates a familiar crypto-market chain reaction: rising prices trigger liquidations, liquidations create forced buying, and forced buying pushes prices higher.
Is the crypto winter finally over?
Bitcoin's recovery is certainly significant, but one strong move does not prove that a new bull market has begun. Bitcoin also ended last week above its 50-week moving average, a closely watched technical indicator. Some analysts view that as an important sign that the market may have stabilised after its recent weakness. At the same time, the rally still faces macroeconomic risks. The US Federal Reserve raised interest rates last week, while markets remain sensitive to inflation, oil prices and the possibility of another rate increase. There is also a notable gap between Bitcoin's current price and its previous record high of roughly $126,000.
What happens next?
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The next test could be whether Bitcoin can hold above the levels it has just reclaimed without relying heavily on forced liquidations. That distinction matters. A rally driven mainly by short sellers being squeezed can fade once those positions are cleared. Sustained gains would require continued demand from spot buyers and investors.
So, is the crypto winter over?
The market is clearly showing signs of recovery, but the latest rally is not enough on its own to declare a new bull market. Bitcoin has regained important ground. Now traders will be watching whether it can hold it.
