Bitcoin rose 2% on Monday and traded near $80,000, its highest price since May. Ether followed, climbing 2% to around $2,500, a level it had not touched since January.
The bigger move happened just before Monday. Bitcoin jumped more than 20% in three days, the strongest 3-day rally since 2023.
The fuel was a short squeeze. A short seller is someone who bets that a price will fall, and when the price goes up instead, that trader has to buy it back. All those forced buys can push the price even higher.
As prices rose, more than $4 billion worth of short positions were liquidated, forcing traders to buy back and pushing the rally even higher. That means losing bets were closed automatically, which adds even more buying pressure to the rally.
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Jonathan Krinsky, a strategist, said, "This pattern looks familiar." A similar move happened in January 2023, but that rally faded and bitcoin fell back to its 200-day moving average. That average is simply the price over the past 200 trading days, and many investors use it as a basic health check for the trend.
The rally had help from outside the crypto world. Last week, the Treasury said it would double purchases of longer-term bonds, which briefly pushed bond yields lower. Lower yields make safe bonds less attractive, so people who want bigger returns start looking at riskier deals, like gold and bitcoin.
When bond yields fall, bitcoin becomes more attractive because it does not pay interest but can offer a larger gain. That dynamic showed up in exchange-traded funds too. Spot bitcoin ETFs, which hold actual bitcoin and trade like stocks, pulled in $1.92 billion in new money last week. That was their biggest weekly intake since October.
Ray Dalio, the founder of Bridgewater Associates, has spent years warning about national debt. He now says major economies could face a debt crisis in the next several years, and he has suggested investors hold at least a small amount of bitcoin.
That is not a normal feeling for someone of his background. But it is a clue: crypto can be attractive for people who worry about the traditional system failing, not only for day traders chasing momentum.
The short-term market picture is mixed. A short squeeze can generate a huge rally, but those rallies can cool just as fast. The January 2023 comparison is a reminder that the same chart pattern does not always lead to the same ending.
The 200-day moving average is the line to watch. If bitcoin stays above it, the trend remains in one direction. If the move fades, that is a possible negative sign. The proof will come over weeks in bitcoin's own action.
For normal investors, the week is connected to a bigger story: bitcoin moved with government policy. This is not just the wild number going up narrative anymore. Lower bond yields, bitcoin, and policy are all tied together.
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