Bitcoin Rises Above $81,000 After Short Squeeze

Bitcoin touched $81,702 before settling around $81,359, up 5.62% on the day and its first move back above $80,000 since Sept. 7. Of the liquidation total, more than $183 million came from short positions, including about $119 million in bitcoin shorts alone, according to market data cited by Investing.com and Yahoo Finance.

That squeeze was reinforced by real-money demand. U.S. spot bitcoin ETFs recorded roughly $159 million in net buying on Sept. 17, a sign that institutions are still adding exposure even after the Federal Reserve and Bank of Japan both raised rates by 25 basis points, a backdrop that normally weighs on risk assets.

For investors, the key takeaway is that bitcoin is not trading like a one-way macro proxy. The cryptocurrency absorbed a tightening-policy shock, then snapped higher as shorts were forced to cover, suggesting the market still has enough liquidity and conviction to punish crowded bearish bets.

The bounce also lifted the wider crypto market, with total market value rising to about $2.66 trillion. Ether, Solana and BNB have all outperformed bitcoin over the past month, while tokenized versions of stocks including Tesla and Nvidia have also drawn attention, pointing to a broader appetite for speculative digital assets.

Bitcoin’s recovery comes even though it remains about 8% lower year to date, underscoring how fragile sentiment still is around the $100,000 mark. Prediction markets remain cautious, with traders assigning only a 25% chance of bitcoin reaching $100,000 this year, while also pricing a meaningful risk of a slide back toward $70,000.

The next test is whether ETF inflows and spot buying can keep pace once the squeeze fades. If they do, bitcoin could continue pressing higher; if not, the same leverage that powered the breakout could make the market vulnerable to another sharp reversal.