Bitcoin surges past $87,000 to 8-month high; 5 factors behind the crypto rally

Bitcoin extended its sharp rebound on Tuesday, briefly climbing above $87,000 over the past 24 hours before paring some gains. The world’s largest cryptocurrency was trading at $85,606, up around 4.5%, at the time of reporting, after touching an intraday high of $87,363 - its strongest level since late January this year.

The latest rally marks a significant recovery from the weakness seen earlier this month, when Bitcoin slipped towards $75,000. The cryptocurrency has gained more than 8% over the past week and around 34% over the last three months, although it remains in negative territory for the year.

Bitcoin’s rebound has also pushed it further away from the correction that followed its record high of more than $126,000 in October 2025. The rally has coincided with improving risk appetite across global markets, renewed institutional demand through spot exchange-traded funds (ETFs), short covering and a breakout above key technical levels.

The broader crypto market also joined the rally, with global market capitalisation rising to around $2.92 trillion, up nearly 5% over the past 24 hours. Among major tokens, XRP led gains with a 7.1% jump to $1.52, followed by Solana at 5% to $116.67. Ethereum, the second most valued crypto asset, rose 3% to $2,739, while BNB gained 1.6% to $790.

Here are five factors driving the latest crypto rally:

1. Easing macro pressure

The broader macro backdrop has become more supportive for risk assets, with oil prices easing from recent highs and the US 10-year Treasury yield retreating from the 5% level. Lower energy prices could ease inflation concerns, while softer bond yields reduce some of the pressure on risk-sensitive assets such as cryptocurrencies.

“The broader macro environment has turned more favourable for risk assets. Oil prices have pulled back from last week’s highs, while long-dated Treasury yields have also eased,” said Riya Sehgal, Research Analyst at Delta Exchange.

Nischal Shetty, Founder of WazirX, also highlighted cooling oil prices and lower Treasury yields as supportive factors. However, he cautioned that elevated crude prices remain a risk because renewed inflationary pressure could keep interest rates and bond yields higher.

2. Stronger Bitcoin ETF inflows

Institutional demand has emerged as another important support for Bitcoin. US spot Bitcoin ETFs have recorded renewed inflows as the cryptocurrency regained key price levels.

Shetty said US spot Bitcoin ETFs recorded approximately $617.6 million in daily net inflows, equivalent to around 7,610 BTC, while aggregate ETF trading volume reached $5.72 billion.

Sehgal said spot Bitcoin ETFs recorded roughly $435 million in net inflows on Friday, their strongest daily inflow since early September. Bitcoin is also trading close to the estimated average cost basis of US spot ETF investors near $85,600.

Binance Research said ETF inflows had already strengthened in August, exceeding $3.5 billion during the month.

3. Short covering adds fuel

The move higher has also been amplified by the unwinding of bearish positions. As Bitcoin crossed key resistance levels, traders holding short positions were forced to buy back the cryptocurrency, adding to upward momentum.

Minal Thukral, Executive VP–Growth & Crypto Business Head at CoinDCX, said Bitcoin moved from around $82,000 to above $85,000 within hours, with more than $300 million of short positions liquidated in a single hour.

“The rally had started before the liquidations. US spot Bitcoin ETFs took in around $593 million across Thursday and Friday. Oil fell and equity futures rose. The move then entered a crowded short zone,” Thukral said.

4. Technical breakout

Bitcoin’s move above the $82,000–$83,000 resistance zone has also strengthened the technical setup. The cryptocurrency had struggled to sustain gains above this region in recent weeks.

“The latest rally has pushed BTC above that resistance and above its major weekly moving averages, improving the broader structure,” Sehgal said.

She sees $82,000–$83,000 as an important support zone, while Shetty identifies $80,000–$82,000 as the broader support area and $90,000 as the next major psychological level.

Binance Research said Bitcoin has also moved back above its 50-week moving average, pointing to improving momentum.

5. Broader crypto market joins the rally

The rebound has spread beyond Bitcoin, with major altcoins also posting strong gains. Thukral said SUI and NEAR gained more than 20%, while RENDER and AVAX rose around 17–18%. Ethereum, XRP, Solana and BNB also advanced.

Institutional demand is also returning to other major digital assets. Shetty said US spot Ethereum ETFs recorded net inflows of approximately 55,640 ETH, with Fidelity and Grayscale accounting for most of the reported allocation.

Binance Research said the crypto ecosystem is increasingly expanding beyond Bitcoin, with stablecoins, tokenisation and blockchain-based financial infrastructure creating stronger links between digital assets and traditional finance.

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