- Bitcoin has climbed above the key $120,000 level for the first time since August.
- This advance is being driven by renewed optimism about macroeconomic tailwinds.
- BTC futures open interest surged to an all-time high of $32.6 billion.
Bulls are back in control. Bitcoin pushed through the important $120,000 resistance and surged to its highest levels since mid‑August as a wave of bullish sentiment swept the market.
This breakout, following five consecutive days of steady gains, suggests traders are firmly preparing bullish positions for the final quarter of the year, undeterred by the political turmoil unfolding in Washington.
The rally is being built on both renewed macroeconomic hopes and strong internal market dynamics.
In the derivatives market, BTC futures open interest has jumped to a record $32.6 billion, a clear sign traders are making large bets on further upside.
Is a short squeeze unfolding?
Beneath the surface of this bullish momentum, a potentially explosive setup is forming.
On‑chain analyst Skew noted that even as open interest has risen sharply, a significant number of short positions have also accumulated.
That mix creates ideal conditions for a short squeeze—when rising prices force a wave of short sellers to buy back positions—injecting further fuel into the rally.
Government shutdown as a catalyst
Ironically, the U.S. political crisis could act as an important catalyst for the market’s renewed optimism.
The ongoing potential government shutdown is introducing severe uncertainty into the economic outlook, and traders appear to believe that this turmoil could ultimately benefit risk assets like Bitcoin.
Treasury Secretary Janet Yellen warned Thursday that a shutdown could have realistic and harmful effects.
“There could be hits to GDP, hits to growth, and hits to working Americans,” she told CNBC.
That economic weakness, combined with the prospect that the Federal Reserve will react to softer employment data, has made rate cuts at the end of the month appear increasingly likely.
From skeptics to converts
The sheer strength of the recent advance has been enough to turn even skeptics into believers.
Paul Howard, senior director at crypto trading firm Wincent, admitted he was initially skeptical of the rebound earlier this week but said the market’s relentless rally changed his view.
“With $BTC trading back at levels last seen in mid‑July, market capitalization has again topped $4 trillion,” he noted.
It has pushed above $115,000 and is climbing gradually, with a CME gap fixing a $110,000 floor—indicating a high probability of continuation above that level.
His conclusion is now as bullish as the market’s momentum. “I expect a sustained move above $120,000 in the coming weeks,” he added.
Quiet days in late September are over, and the battle for the next highs has begun.