Bitcoin climbed above $70,000 on Monday for the first time since March, as traders rushed to pull back bearish positions despite the lack of clarity on ceasefire negotiations in the Middle East.
The original cryptocurrency advanced more than 4%, surpassing $70,300 before paring some of the gain. Smaller tokens including Ether and Solana also rose.
The surge comes as Tehran rejected a proposed ceasefire and demanded a permanent end to the war. Trump escalated pressure on Iran over the weekend and continued his threats Monday, but he also said that talks are moving ahead.
“Heading into the weekend, sentiment was heavily skewed bearish and short interest had built up across the market,” said Diana Pires, chief business officer of sFOX. “Once ceasefire headlines hit, that positioning had to unwind, and that’s what drove the move higher.”
More than $145 million in short positions had been liquidated in the past day, according to CoinGlass data, which added that more short positions were liquidated as Bitcoin’s price moved higher. “When markets opened today, the switching of shorts into equity futures and the covering of some positions caused a squeeze higher in illiquid conditions,” said Damien Loh, chief investment officer at Ericsenz Capital.
Bitcoin has been stuck in a range between roughly $60,000 and $75,000 since the conflict in Iran began in late February, at one point jumping to a high of nearly $76,000 before tumbling. For much of the past two weeks, the token traded below $70,000.
“Every approach to the $70,000 to $80,000 band meets thin liquidity and profit-taking pressure, capping the bounce,” according to a report from blockchain data firm Glassnode. Options markets are also shifting toward a more defensive posture, the report said.
The highest open interest is concentrated in $60,000 puts, according to data compiled by Coinbase Inc.’s Deribit. Traders often use puts, which give the holder the right to sell the underlying asset at a specific price, to hedge against declines.
Meanwhile, institutional selling pressure appears to be easing. US-listed spot Bitcoin exchange-traded funds recorded $22.3 million in net inflows last week, a sharp turnaround from nearly $300 million in net outflows the week prior.
“Participation remains soft across exchange, ETF, and on-chain activity, suggesting conviction has not yet fully returned,” the Glassnode report said. “For this move to prove more durable, stronger follow-through in volume, capital inflows, and network activity will likely be needed.”
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