Bitcoin Sheds Middle East Risk..."If a Short Squeeze Explodes, It'll Go to $85,000"

▲ Bitcoin (BTC)/AI Generated Image ©

As the suppressed geopolitical tensions in the Middle East dramatically eased, coupled with astronomical buying from giant corporations and government liquidity injections, major virtual assets like the leading cryptocurrency Bitcoin (BTC) and XRP (Ripple) have begun an unstoppable storm rally, targeting the $85,000 mark.

According to the investment media outlet TradingNews on April 22 (local time), Bitcoin surged 4.56% in a single day on Wednesday, hitting a 11-week high of $79,305. Ethereum (ETH) also broke past $2,404, and XRP rose to the $1.45 level. This widespread bullish momentum is a primary result of the dissipation of geopolitical uncertainties that had been weighing on the market, following US President Donald Trump's indefinite extension of the truce with Iran and his indication of a possible easing of the naval blockade in the Strait of Hormuz.

Another key factor driving the market's rise is Strategy's aggressive accumulation and macroeconomic liquidity injection. Strategy invested $2.5 billion, its largest weekly purchase since November 2024, acquiring 34,164 Bitcoins at an average price of $74,395, increasing its total holdings to 815,061 units. Furthermore, with the US Treasury planning to execute a $15 billion bond buyback, supplying massive liquidity to the financial system, expectations that this surplus capital will flow into high-risk assets are strongly supporting the rally.

Interestingly, prices are surging despite the fact that inflows into spot exchange-traded funds haven't been explosive. The media diagnosed that there is still abundant institutional capital waiting, and once fund inflows fully materialize, the upward trend could accelerate further. Moreover, in the derivatives market, an unusual situation is unfolding where the 30-day average funding rate has been negative for an astonishing 53 consecutive days, creating perfect conditions for a massive short squeeze (buying pressure that occurs to liquidate or cover short positions) to explode, forcing short sellers to close their positions if prices rise.

The technical structure also points to a major uptrend. The Bollinger Bands, which have contracted to their narrowest ever on a monthly chart, and the Relative Strength Index (RSI) entering the oversold territory, precisely match the patterns seen at the beginning of past bull markets that led to hundreds of percent surges. In the short term, $78,250 is a critical turning point that will determine the upward trend; if this support level is successfully defended and the psychological resistance of $80,000 is broken, Bitcoin could directly reach $85,000 by the end of the month, surpassing the 200-day exponential moving average at $82,769.

Currently, Bitcoin is proving its hybrid value as an alternative asset that defends against geopolitical crises, moving beyond a simple risk asset, and is absorbing capital from both gold and tech stocks. Experts advised that at this moment, with macroeconomic tailwinds, institutional accumulation, and technical bullish patterns perfectly aligning, a short-term correction to the $76,000 range should be considered a buying opportunity, and close attention should be paid to whether it breaks past $80,000.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses incurred based on it. The content should be interpreted for informational purposes only.*