Bitcoin price surges above $87,000 to 8-month high: ETF inflows, short squeeze fuel crypto rally

Bitcoin surged above $87,000 to an eight-month high as a broader recovery in global risk assets spilled into cryptocurrencies, with renewed buying in US spot Bitcoin ETFs and short covering adding momentum to the rally. Bitcoin rose as much as 7.7 per cent to $87,354 in New York, extending its rebound by more than $10,000 from last week's lows.

The cryptocurrency was trading around levels last seen in late January, though it remained about a third below its record high of more than $126,000 reached in October 2025.

The rally came alongside gains in global stocks and bonds, while easing oil prices and optimism around a planned summit between US President Donald Trump and Chinese President Xi Jinping improved broader market sentiment. Smaller cryptocurrencies also advanced, with Dogecoin rising as much as 14 per cent and XRP gaining about 8 per cent.

Crypto markets also saw heavy liquidations during the rally. Citing CoinGlass data, Bloomberg said liquidations of long and short positions across digital assets climbed to about $1 billion over 24 hours, the highest level since late August. Short positions accounted for about $878 million of the liquidations.

Vikas Gupta, Country Manager - India at Bybit, said Bitcoin's recovery was being supported by institutional demand and spot ETF inflows. "Bitcoin's recent recovery toward the $86,000-$87,000 range is being supported by renewed institutional demand, stronger spot ETF inflows and evolving US regulatory developments," he said. "Short covering and improving risk appetite have further supported the upmove, while easing oil prices have helped moderate some inflation concerns."

Binance Research said Bitcoin had absorbed the recent Federal Reserve rate hike and the setback to the CLARITY Act, while ETF inflows had helped sustain the recovery. "August's large short squeeze cleared substantial bearish positioning, while stronger ETF inflows ($3.5B+ over the month and strongest inflows in 2026) helped sustain the recovery," Binance Research said.

Avinash Shekhar, Co-founder and CEO of Pi42, said strong spot ETF inflows, institutional buying and improving risk appetite had renewed momentum across the crypto market. "The decisive move beyond the $80,000 resistance has strengthened the near-term outlook, although profit-booking could lead to intermittent volatility," Shekhar said. "Bitcoin may now test the $88,000-$90,000 zone, while $82,000 is emerging as an important support level."

The broader crypto market also advanced, with total market capitalisation rising 2.15 per cent to $2.92 trillion and trading volumes increasing nearly 63 per cent to $144 billion over 24 hours. Bitcoin's market capitalisation rose more than 2 per cent to $1.72 trillion, while trading volume nearly doubled to $54 billion.

Bitcoin's market dominance stood at 59.2 per cent. Among major tokens, XRP gained 7.1 per cent to $1.52, Solana rose 5 per cent to $116.67, Ethereum advanced 3 per cent to $2,739 and BNB gained 1.6 per cent to $790.

CoinSwitch Markets Desk said Bitcoin had broken above the $82,000 resistance, with roughly $750 million in short positions liquidated, while futures open interest increased by around $2 billion. "However, the key question is whether spot demand can sustain the rally as leverage builds," CoinSwitch said.

"Without stronger underlying buying, elevated positioning could make BTC vulnerable to sharper pullbacks." Overall, the move above $87,000 was driven by ETF inflows, institutional demand, short covering and an improved macro backdrop, while market participants continued to watch whether spot buying would be strong enough to sustain the rally.