- Bitcoin has surpassed the key $120,000 level for the first time since August.
- The rally is being driven by renewed optimism about macroeconomic tailwinds.
- Open interest in BTC futures has hit a record $32.6 billion.
Bullish momentum is back in control. Bitcoin has broken through the critical $120,000 resistance level, climbing to heights not seen since mid‑August as a powerful wave of optimism sweeps the market.
The breakout, following a steady five‑day advance, suggests traders are positioning decisively for a bullish final quarter of the year, seemingly unfazed by the political turmoil unfolding in Washington.
This rally is supported both by renewed macroeconomic hope and strong internal market dynamics.
In the derivatives sector the conviction is clear: open interest in BTC futures surged to a new record of $32.6 billion, a strong indication that traders are placing large bets that the uptrend will continue.
Is a short squeeze forming?
Beneath the surface of this rally, a potentially explosive configuration is taking shape.
On‑chain analyst Skew has pointed out that even as open interest skyrockets, a significant number of short positions are accumulating.
That combination creates ideal conditions for a short squeeze — a sharp upward price move triggered when rising prices force short sellers to buy back positions, which in turn fuels further gains.
The shutdown factor: a crisis turns into a catalyst
Ironically, the U.S. political crisis may be a key catalyst behind the renewed market optimism.
The ongoing government shutdown has injected deep uncertainty into the economic outlook — a disorder that traders appear to believe will ultimately benefit risk assets such as Bitcoin.
Treasury Secretary Scott Bessent warned on Thursday that the shutdown could have a real and harmful impact.
“We could see a hit to GDP, a hit to growth and a hit to the American worker,” he told CNBC.
This economic weakness, coupled with the reality that the Federal Reserve will be missing a fresh jobs report, increases the likelihood of an interest rate cut later this month.
From skeptic to believer
The strength of the recent advance has been enough to convert even skeptics into believers.
Paul Howard, senior director at crypto trading firm Wincent, admitted he was skeptical about a rally earlier in the week, but the market’s relentless ascent changed his view.
“With $BTC trading again at levels last seen in mid‑July, total market capitalization is back above $4 trillion,” he noted.
We have seen a steady climb above $115,000, which suggests we are now more likely to remain above this level, with a CME gap helping to secure a floor near $110,000.
His conclusion is now as bullish as the market’s momentum. “I believe we are now poised to see a sustained push above $120,000 in the coming weeks,” he added.
The quiet days of late September are over and the fight for the next leg higher has begun.