Why Did Bitcoin Rise This Week?
The crypto market witnessed a strong recovery this week, led by Bitcoin which jumped to an eight-month high, crossing the $85,000 mark, after dropping below $76,000 last week.
This rally was not driven by a single factor, but by the convergence of 5 key factors:
1. Strong Return of Spot ETF Inflows
The main driver was the return of institutional demand. On Friday, September 18 alone, US spot Bitcoin ETFs recorded net inflows of around $433 million, led by Fidelity and BlackRock funds, turning the entire week's performance from negative to positive after weeks of outflows.
2. Short Squeeze
The sudden surge forced bearish traders to close their positions at a loss. About $357 million in positions were liquidated, with nearly two-thirds being short positions, which created additional buying pressure that amplified the rally.
3. Positive Regulatory Signals from the US
Despite the failure to pass the CLARITY Act in the Senate last week, the market interpreted regulatory moves positively. The Securities and Exchange Commission (SEC) granted a temporary five-year exemption allowing tokenized US stocks to trade on blockchain platforms, and the CFTC submitted new proposals for regulating digital asset markets for White House review, seen as a step toward a clearer regulatory environment.
4. Improved Global Risk Appetite
Macroeconomic factors also supported the rise. Oil prices fell by about 10% from their peak and the 10-year US Treasury yield dropped from 5.01% to 4.96%, easing inflation concerns. Optimism also prevailed ahead of an anticipated summit between US President Donald Trump and Chinese President , lifting equities and high-risk assets together.
5. Historic Technical Breakout
Technically, Bitcoin closed the week ending September 20 at $81,159, above its 50-week moving average of $78,786 — the first such close in 45 weeks. Historically, this breakout is considered a strong signal that the bear market bottom has formed, prompting new traders to enter.
What Next?
Despite the momentum, Bitcoin is still far from its January 2026 peak above $97,000 and faces a strong supply zone between $81K and $86K where some investors may take profits. The key level now is $81,700 (the 365-day moving average). Holding above it could open the way to $88-89K, while a breakdown below would weaken the current bullish structure.
