Bitcoin reached a new high of $81,702 on September 18, surpassing $81,000 for the first time since September 7, as a wave of short liquidations and renewed spot demand fueled its rebound. The cryptocurrency climbed 5.62% in a single day, trading at $81,309.4 as of 22:50 ET, according to Investing.com. The surge followed a period of volatility triggered by the Federal Reserve’s 25-basis-point interest rate hike and the Bank of Japan’s 1.25% policy rate increase, which initially pushed Bitcoin below $76,000. However, the expected selloff failed to materialize, with U.S. spot Bitcoin ETFs recording $159 million in inflows on September 17, providing fresh demand.
Bitcoin Surges Above $81,000 Amid Short Squeeze
Short Liquidations and Market Dynamics
A sharp short squeeze accelerated the rally, with over $192 million in leveraged crypto positions liquidated within one hour on September 18. Bitcoin shorts accounted for $119 million of the total, according to Yahoo. Decrypt.co reported that Bitcoin-specific short liquidations reached $230 million, while the broader crypto market saw $445 million in short bets wiped out. The liquidations were driven by traders betting on price declines, who were forced to buy back Bitcoin as its price surged. This mechanism, known as a short squeeze, occurs when rising prices compel short sellers to cover their positions, further pushing prices higher.
The surge also coincided with regulatory developments. The U.S. Senate’s failure to advance the CLARITY Act, which aims to clarify crypto regulations, left uncertainty in the market. However, the CFTC submitted a separate crypto market proposal to the White House, while the SEC introduced an innovation exemption for tokenized stock trading. Despite these moves, market positioning remains cautious, with Polymarket traders assigning an 84% probability of Bitcoin reaching $84,000 before falling to $55,000.
Technical Indicators and Price Targets
Technical analysis suggests Bitcoin’s bullish momentum may continue. Decrypt.co noted that Bitcoin’s 50-day exponential moving average (EMA) crossed above the 200-day EMA, forming a “golden cross”—a classic bullish signal. The Relative Strength Index (RSI) stood at 63.3, indicating strong momentum but not yet overbought territory. Analysts highlighted key resistance levels, including $82,281, the top of the current Fibonacci leg, and support at $75,569, the 61.8% retracement level. A close above $82,281 could confirm a sustained breakout.
Despite the rally, risks persist. Polymarket traders gave Bitcoin a 59% chance of reaching $90,000 by year-end but only a 25% probability of hitting $100,000. The Squeeze Momentum Indicator, which measures volatility compression, has remained “on” for 11 consecutive bars, signaling prolonged uncertainty. Meanwhile, the BVIV Index, tracking expected Bitcoin volatility, rose above 40 after falling to a 2026 low of 35.5, reflecting renewed market turbulence.
Regulatory Uncertainty and ETF Inflows
Regulatory developments continue to shape Bitcoin’s trajectory. The Clarity Act’s stalled progress in the Senate has left market participants wary, though the CFTC’s proposed rules and the SEC’s innovation exemption offer potential clarity. Meanwhile, spot Bitcoin ETF inflows have provided a critical support level. According to 247wallst.com, U.S. spot Bitcoin ETFs attracted $606.3 million on Thursday, with weekly inflows totaling $1.61 billion. These flows are seen as a key factor in sustaining the rally, though analysts caution that the “fuel” from short liquidations is running dry.
Investors are also watching the broader macroeconomic environment. A sharp decline in longer-term Treasury yields, coupled with President Donald Trump’s renewed push for crypto legislation, has boosted risk appetite. Standard Chartered’s Geoffrey Kendrick predicted Bitcoin could reach $100,000 by year-end, citing the positive impact of falling yields on higher-risk assets. However, the cryptocurrency remains 43% below its 2026 all-time high of $126,198.