Key Takeaways
- Bitcoin reclaimed $81,000 on Thursday, driving its market cap past $1.62 trillion.
- The short squeeze wiped out over $415 million in short positions across crypto derivatives.
- Analysts warn bitcoin could face a bull trap if it fails to clear $83,000 resistance.
Bitcoin Price Reclaims $81,000 as Geopolitical Tensions Ease, Dips Back After Intraday High
Bitcoin’s price trend rebounded Thursday, reclaiming $80,000 as hostilities paused between the United States and Iran. The sudden onset of conflict had previously sent crude oil prices surging and equities sliding as global markets braced for potential trade disruptions through the Strait of Hormuz.
Yet prior to Thursday morning’s surge, bitcoin oscillated between $77,000 and $77,500 through late Wednesday. However, by 10:35 p.m. that evening, the cryptocurrency appeared to establish support above $77,500, holding that threshold and twice attempting to break $78,000. Bullish momentum accelerated around 6:40 a.m. EST, pushing bitcoin toward $81,000 by 11:05 a.m. EST.
The surge pushed bitcoin’s market capitalization back above $1.62 trillion for the first time in September, echoing the August rally where the asset gained over $10,000 in four days. At 10:52 a.m. EST, bitcoin traded above $80,800, up nearly 5% over 24 hours.
In derivatives markets, the sudden price surge triggered over $164 million in short-position liquidations in four hours, compared to $7.3 million in long positions. Total bitcoin liquidations in four hours alone accounted for more than three-quarters of the $203 million liquidated over the prior 24 hours. Total crypto market liquidations reached $510 million, with wiped-out short positions exceeding $415 million.
Following bitcoin’s recent tumble towards $76,000, market analysts warned the cryptocurrency could face a deeper correction, threatening to erase a significant portion of its August rally. Primary among their concerns was the escalation of U.S. military action in the Middle East, which in recent months has weighed on the cryptocurrency.
Bearish Strategists Warn of an $83,000 ‘Bull Trap’
However, bitcoin’s sudden rebound, even as Brent crude prices remain elevated, signals a potential shift in institutional and retail sentiment. Rather than trading purely as a high-beta tech proxy sensitive to geopolitical turmoil, bitcoin’s resilience suggests investors may increasingly view the asset as a hedge against inflation and broader financial contagion driven by persistent energy market volatility.
Despite bitcoin’s rebound, some bearish analysts caution that the asset remains trapped in the final stages of a classic “bull trap.” Technical strategists note that bitcoin’s sharp rejection near the critical $83,000 resistance zone, a key structural ceiling aligned with long-term holder supply, indicates that the current relief rally may be nearing exhaustion.
Without sustained institutional spot buying to clear overhead supply, market observers warn that price action risks devolving into a distribution phase. In this scenario, retail investors chasing momentum risk provide exit liquidity for institutional traders and whales unwinding positions before a broader market retreat.
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