Bitcoin climbed to $87,350 on Monday, its highest level since January 29. On Tuesday the price eased slightly and held near $86,000, but over those two days $648 million in short bets got liquidated. The market read the move as more than a routine daily spike, treating it as a possible signal that a new bull cycle is starting.
What actually happened to the price?
The move started on Monday. Short positions fell one after another, and exchanges liquidated $648 million worth of bets within a day. That cascade pushed the price to $87,350 for the first time in nearly eight months. By Tuesday the volatility had cooled and the price settled a bit below the peak.
The mechanics are simple. Traders who open leveraged short positions are betting the price will fall. When the price rises instead, exchanges force-close those positions, and the trader has to buy the asset at the market price to cover the loss. The more of these forced purchases happen at once, the harder they push the price up further, feeding the same cycle again.
Altcoins gained alongside bitcoin. Total crypto market capitalization moved back above $3 trillion, and Ethereum tested the $2,700 area. Open interest in derivatives on exchanges also rose, which means the move pulled in new speculative money, not just traders closing out losing shorts.
Why are analysts calling this a new bull cycle?
The main argument here has less to do with the price itself and more with how coin holders are behaving. Onchain analytics platform Glassnode pointed to the MVRV ratio, which compares bitcoin's market value to the price paid when coins last moved onchain. It crossed above its 365-day average and now sits at 1.62, up from 1.19 in mid-August.
According to Glassnode, this kind of crossover has happened only twice in recent years, at the start of the 2019 and 2023 bull markets. CryptoQuant added its own reading of the data.
An accumulation phase is a period when long-term holders buy coins from people selling at low prices, while the price itself moves sideways. MVRV captures exactly that shift. When the ratio breaks away from low values and settles above its average, it means fewer holders are sitting on losses and more are holding coins at a profit.
- MVRV above its yearly average: a pattern that previously preceded long stretches of price growth.
- The 30-day moving average of MVRV broke above resistance at 1.5 for the first time since January.
- CryptoQuant reads this breakout as the end of a long accumulation phase by large wallets.
- The ratio is still far from the 3.7 overheating zone seen at previous cycle tops.
- If the 1.5 level holds, CryptoQuant points to bitcoin's all-time high of $126,200 as the next target.
What do oil prices and Trump's remarks have to do with it?
The rally coincided with a drop in oil prices. WTI crude fell to $89.16 a barrel, its lowest level since September 4. Reports that Saudi Arabia had reopened the East-West pipeline added pressure. Sources cited by Reuters said it would take six to eight weeks to reach full capacity.
Oil markets have been jittery for weeks over the risk of an armed escalation around Iran, which could disrupt shipping through the Strait of Hormuz, a key route for oil exports out of the Persian Gulf. Any news pointing to de-escalation tends to lower the risk premium built into oil prices, and along with it, the premium priced into risk assets.
At the same time, at the UN General Assembly, US President Donald Trump said: "I believe we'll make a deal right after the election because it doesn't make sense for them not to." He was referring to a possible agreement with Iran after November's US midterm elections. Cheaper oil tends to ease inflation worries and support demand for risk assets, crypto included.
What does this mean for bitcoin holders?
Sharp moves driven by short liquidations often unwind just as fast as they build. Part of this rally reflects traders buying back positions rather than genuinely new capital entering the market.
At the same time, the MVRV reading gives reason to look at the picture more broadly. CryptoQuant's view is that the market has only just left a long accumulation phase, and it remains far from the overheated zone seen at past cycle tops.
Similar $600-700 million liquidation spikes have happened earlier this year, and not every one of them turned into a lasting trend. Short-term traders typically wait for confirmation. That usually means the price holding above $86,000-87,000 for several days, or fresh inflows into bitcoin ETFs.
The price move is already felt by Ukrainian crypto holders too. Demand for deals to sell Bitcoin for hryvnia typically rises on days with sharp price swings, as some traders lock in profits.
The coming days will show whether $86,000 holds as a new support level or the market slides back to where it started the week. For now, both the technical indicators and trader sentiment lean toward continued upside.
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