The collapse of 648 million short positions pushed BTC to break through 85,000, and the signal of a bull market is questionable

According to Woofun AI, the price of Bitcoin broke through the $85,000 mark, the strongest one-sided increase since January of this year, mainly due to the improvement in the geopolitical situation caused by the progress of US-Iran diplomacy and the subsequent passive liquidation of large-scale short positions. The recovery in market risk appetite and the intense game of leveraged capital together form the core driving force behind this price jump.

Judging from the microstructure of the market, behind price fluctuations is the redistribution of huge amounts of capital. According to CryptoSlate data, Bitcoin rose by more than 5% in the past 24 hours, hitting $84,545, with a cumulative increase of about 29% over 35 days.

According to data compiled by Woofun AI, CoinGlass detected a total liquidation of US$750.5 million within 24 hours, of which US$648 million (86%) was a short liquidation involving 137,386 traders; BTC liquidations amounted to US$360 million, ETH about US$171 million, and the largest single liquidation on the Binance platform reached US$11.29 million.

Meanwhile, CryptoQuant data revealed that the Binance platform's 1-hour net purchases surged from $11 million to $618 million, showing a sudden imbalance in buyers' power. The current value of open contracts is approximately US$28.83 billion, approaching the May record. The high leverage environment further amplifies price volatility.

Technical analysis shows that Bitcoin has broken through the resistance level that has suppressed its rebound for a long time and reached a 50-week moving average last week for the first time since November 2025, ending a 45-week trend below the moving average. Alex Thorn (Alex Thorn), head of company-wide research at Galaxy Digital (GLXY.US), pointed out that a return to this moving average usually indicates the bottom of a bear market, but the history between 2021-2022 shows that this signal is not absolutely reliable. CryptoQuant CEO Kaiyang Zhu (Kaiyang Zhu) emphasized the supporting role of the 365-day moving average, believing that maintaining this level could attract runners and institutions to enter the market. Bitcoin analyst Joe Consorti (Joe Consorti) judged that the market has initially entered a “bull market” stage based on this, but this view still requires subsequent financial verification.

However, the contrast in the on-chain data reveals potential risks. According to Santiment data, the number of new addresses and active addresses was only on average from July 24 to September 20. The amount of social activity was 1.23 times normal, and the volume of transactions over $100,000 was 1.18 times normal, none of which reached a two-month high. In contrast, when BTC rose nearly 7% on August 21, new addresses and active addresses reached 1.07 times and 1.14 times normal, respectively, and the number of new wallets added in 10 working days in the past two months surpassed that of September 18. On September 18, the number of open positions increased by about 9%, highlighting that the activity of derivatives was much higher than that of the network itself. The rebound continues to depend on new spot demand. After shorting and filling positions weakens, new capital replacement is needed to maintain support above $85,000.