bitcoin rose above $79,000 on Wednesday, hitting its highest level since early February, as a long-awaited breakout attempt gained momentum.
The largest cryptocurrency is up 4.5% in the last 24 hours, leading major altcoins ether (ETH) and BNB. Solana (SOL) and XRP on the rise. The CoinDesk 20 broad market index advanced 3.5%.
Cryptocurrency-linked stocks also rose. Strategy (MSTR), the largest corporate holder of BTC, rose 10%, while stablecoin issuer Circle Internet (CRCL) gained 9% and cryptocurrency exchange Coinbase (COIN) rose 6%. Bitcoin miners MARA Holdings (MARA) and Riot Platforms (RIOT) added 6% to 7%.
The broader macroeconomic context was also favorable. The S&P 500 rose 0.9% and the Nasdaq added 1.3% to reach all-time highs, widening the risk environment.
The developments followed US President Donald Trump’s comment on Tuesday night that he would extend the ceasefire with Iran while maintaining a naval blockade of the Strait of Hormuz. Still, uncertainty remains over the peace talks.
“BTC’s near-term direction remains largely dependent on macro and geopolitical developments,” said Paul Howard, senior director at Wincent. He pointed to $72,000 as key support, and upside potential could be capped near the $80,000 range as traders take profits.
Bitcoin Short Squeeze Potential
While macroeconomic risks still remain, positioning in derivatives could fuel the rally higher.
Perpetual swap traders continue to have a strong bearish bias, with seven-day funding rates at near three-year lows, said Vetle Lunde, head of research at K33 Research. At the same time, open interest continues to trend higher, suggesting new leverage is entering the market.
“Rising leverage coupled with deeply negative financing suggests that short positions are steadily accumulating criminals, increasing both the probability and potential magnitude of a short squeeze,” he wrote.
“We continue to see strong breakout potential for BTC, with concentrated shorts providing enough fuel for a bullish move,” Lunde added.
However, the $80,000 area has additional weight for bitcoin. It aligns with the short-term holder’s realized price, a measure of the average cost basis for new market entrants, which tend to be more sensitive to volatility and more likely to sell hard.
For now, BTC is testing that hurdle. A clean move above it could indicate stronger conviction behind the rally, but failing to sustain could lead to fresh selling pressure and profit-taking by short-term holders.
