- Bitcoin has broken above the key $120,000 level for the first time since August.
- The rally is being fueled by renewed optimism around supportive macroeconomic tailwinds.
- Open interest in BTC futures has climbed to a record $32.6 billion.
Bulls have regained the upper hand. Bitcoin pushed through the critical $120,000 resistance level, reaching heights unseen since mid‑August when a powerful wave of optimism swept the market.
The breakout, which follows a steady five‑day advance, signals that traders are firmly positioned for a bullish final quarter of the year, undeterred by the political turmoil unfolding in Washington.
This rally is driven both by renewed macroeconomic confidence and strong domestic market dynamics.
In the derivatives market that conviction is clearly visible: open interest in BTC futures surged to a new record of $32.6 billion, a clear sign that traders are placing large bets on further upside.
Is a short squeeze building?
Beneath this bullish thrust, a potentially explosive setup may be forming.
On‑chain analyst Skew noted that even as open interest has risen sharply, a significant number of short positions have accumulated.
That creates ideal conditions for a short squeeze — a sharp upward price move triggered when rising prices force short sellers to cover, which in turn adds fuel to the rally.
Shutdown factor: crisis becomes catalyst
Ironically, the political crisis in the United States could act as a key catalyst for renewed market optimism.
The ongoing government shutdown has injected deep uncertainty into the economic outlook — a kind of chaos that traders believe could ultimately favor risk assets like Bitcoin.
U.S. Treasury Secretary Scott Bessent warned on Thursday that the shutdown could have real and damaging effects.
“We could see a hit to GDP, a hit to growth, and a hit to working America,” he told CNBC.
That economic weakness, combined with the fact that the Federal Reserve will be operating without a fresh jobs report, makes a rate cut later this month appear increasingly likely.
From skeptic to believer
The recent advance has been strong enough to convert skeptics into believers.
Paul Howard, senior director at crypto trading firm Wincent, admitted he was skeptical of the rebound earlier in the week, but the market’s steady climb changed his view.
“With $BTC trading at levels last seen in mid‑July, overall market capitalization has once again topped $4 trillion,” he said.
We saw a gradual rise, breaking above $115,000, suggesting we are now more likely to remain above that level, with the CME gap now sitting on the floor at $110,000.
His conclusion is now as bullish as the market’s momentum. “I believe we are positioned to see a sustained rally above $120,000 in the coming weeks,” he added.
The quiet days of late September are over — the fight for the next leg higher has begun.