Bitcoin traded near $86,000 on Monday, its highest level since late January, as falling oil prices and a record Nasdaq close lifted risk appetite across markets. Spot bitcoin ETFs pulled in nearly $1 billion, but futures data suggest much of the move came from short covering rather than fresh buying.
Bitcoin traded near $86,000 on Monday, recovering from Asian-session lows of around $85,000 after breaking above its May high, touching its highest level since late January. The move extended a rally that left bitcoin up more than 7% on the day, its strongest level since Jan. 28, when it traded at $89,004.47.
Falling Oil Adds to the Rally
Falling oil prices did much of the work. WTI crude futures fell more than 2% to below $90 a barrel, retreating from a recent high of $106, after Kyodo reported that Iran was willing to reopen the Strait of Hormuz within seven days if the U.S. eased its blockade. Lower oil prices could ease inflationary pressure and weaken the case for additional Federal Reserve rate increases in the months ahead.
Stocks Rally Alongside Bitcoin
The gains came alongside a broader risk-on move on Wall Street. The Nasdaq Composite advanced 2.3% to close at a record high for the first time since June, while the S&P 500 rose 1.5% and the Dow Jones Industrial Average added 0.7%. Tech and AI-linked names surged in tandem, with the Roundhill Magnificent Seven ETF up 3.5% and the PHLX Semiconductor Index jumping 4.3%.
ETF Inflows and Corporate Buying Add Fuel
U.S.-listed spot bitcoin ETFs attracted nearly $1 billion in inflows on Monday, their largest single-day haul since October last year. Strategy, led by Michael Saylor, disclosed its first bitcoin purchase in three weeks, buying $75.7 million worth at an average price of $79,670 per coin, and its shares rose 9.5%. Strive added to its own position, buying 1,355 Bitcoin for about $107.7 million between September 14 and 18, which lifted its total holdings to 26,355 Bitcoin.
Derivatives Point to a Short Squeeze
Not every signal is as constructive. Total crypto futures volume jumped 38% to $292 billion in the past 24 hours while open interest rose just 1% to $157 billion. Combined with $768 million in liquidations, mostly on short positions, that pattern points to a short squeeze rather than fresh, conviction-driven positioning, according to CoinDesk. Bitcoin's own open interest climbed to 716,000 BTC, the most since Aug. 25, though still below the roughly 750,000 BTC average from April to July.
Sentiment moved with the price. The Crypto Fear and Greed Index tracked the shift. The gauge climbed to 78, or Extreme Greed, from 70 on Monday and 69 a week earlier.
The Coinbase Premium Index, which tracks buying pressure on the U.S. exchange, remains negative at -0.028, though it has recovered from deeper readings earlier in September.
Sources: CoinDesk, MarketWatch, BeInCrypto
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