Key facts
- Bitcoin price rose above $87,000, its highest level since January.
- The rally was supported by improved risk sentiment following a US proposal for a $5 billion Gulf energy reconstruction fund.
- The fund aims to repair infrastructure damaged during the Iran war and reduce reliance on the Strait of Hormuz.
- Approximately $919 million in crypto short positions were liquidated, adding buying pressure.
- Spot Bitcoin ETF inflows also contributed to the price increase.
- Crypto analyst Michaël van de Poppe identified $90,000 to $91,000 as the next resistance zone for Bitcoin.
Bitcoin's price surged past $87,000 on Monday, marking its highest level since January, as a broad cryptocurrency rally forced bearish leveraged positions out of the market. The upward momentum was bolstered by improved risk sentiment stemming from a proposal by the Trump administration to establish a $5 billion Gulf energy reconstruction fund.
The proposed fund, as reported by The Wall Street Journal, aims to support infrastructure damaged during the seven-month Iran war and would seek matching contributions from Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, Oman, Iraq, and Jordan. It would also focus on developing alternative oil and gas transport routes to reduce reliance on the Strait of Hormuz.
The rally coincided with falling oil prices and softer Treasury yields, factors that typically support risk assets. The liquidation of approximately $919 million in crypto short positions, with over $557 million attributed to Bitcoin shorts, added further buying pressure. Spot Bitcoin ETF inflows also played a role in the advance.
Despite the liquidation wave, leverage in the market remained elevated, indicating traders are adding exposure. Crypto analyst Michaël van de Poppe has identified $90,000 to $91,000 as the next key resistance zone for Bitcoin, with potential to extend towards $98,000 to $100,000 if momentum continues. Prediction-market traders on Polymarket assign a 42% probability to Bitcoin reaching $100,000 by the end of 2026.
Glassnode reported that Bitcoin remains above its true market mean and short-term holder cost basis, levels historically associated with stronger market regimes. However, the increasing crowd in the rally and high Bitcoin FOMO suggest potential for amplified volatility near the $90,000 resistance zone.