The signal bitcoin investors have been anticipating may finally have materialized.
After months of declines, market professionals indicate bitcoin could be returning to a long-term upward trajectory, with the cryptocurrency experiencing a sharp rally over the past week as digital asset investors re-entered the market.
The token, which had dropped as low as $59,000 earlier this year, climbed another 5% on Monday, surpassing $85,000. This marks the first time bitcoin has breached this level since late January, around when its sell-off intensified.
To investment experts, this represents the latest indication that the prolonged crypto winter may be ending.
“It’s crypto spring, the crocuses are blooming,” Matt Hougan, chief investment officer of Bitwise Asset Management, told CNBC on Monday. “I believe this will actually be the strongest and longest-running bull market in crypto’s history,” he added.
Speaking to The Block at a New York summit last week, Zach Pandl, head of research at crypto firm Grayscale, also stated bitcoin’s “bear market phase” was likely over, with the token hitting a cycle low near $58,000 in late June.
“We are certainly giving the green light to our clients,” Pandl said at the event.
Here are four forces driving the latest surge:
1. Regulatory optimism
Bitcoin initially received a boost when President Donald Trump promoted the CLARITY Act at the White House’s crypto summit last month. The landmark legislation aimed to establish a regulatory framework for digital assets, further solidifying institutional investor adoption.
Although the bill failed to pass the Senate last week, investors secured a regulatory win on Thursday when the Securities and Exchange Commission authorized limited trading of tokenized shares on certain blockchain platforms for a five-year period.
On Friday, the Commodity and Futures Trading Commission also submitted a new proposal to regulate crypto markets and transactions.
“The failure of the CLARITY Act to advance in the US Senate might ordinarily have been expected to weigh on crypto prices. Instead, the market largely looked through it,” Alice Liu, head of research at CoinMarketCap, wrote in a note. “The implication is that traders have not abandoned the prospect of clearer US rules.”
2. Strong retail and institutional demand
US spot bitcoin ETFs attracted $593 million in inflows over Thursday and Friday, offsetting significant outflows recorded on Tuesday and Wednesday, according to Bloomberg data. Net inflows totaled $6 million for the week.
Investors sold bitcoin earlier in the week anticipating the Fed would raise rates, which would pressure risk assets like crypto. The selling may also have been fueled by the Senate’s vote on the CLARITY Act on Wednesday.
Open interest in bitcoin, a measure of outstanding derivative contract value like options or futures, is also rising. Over the past seven days, open interest has climbed 8% to $55.7 billion, ranking in the 92nd percentile over the last 90 days, CoinMarketCap data shows.
“Traders are adding leverage into strength rather than being squeezed into it. That is a healthier composition than the market had during this year’s failed rallies,” Liu said.
3. Oil prices and yields are falling
Treasury yields, a major constraint on risk assets recently, have begun to retreat as investors process lower oil prices.
Crude prices have tumbled over the past week as concerns about Middle East supply disruptions have eased, particularly since flows from the region remain “surprisingly strong,” JPMorgan analysts wrote in a note last week. Brent, the international benchmark, traded around $101 a barrel on Monday, down 7% from its earlier peak of $109.
The benchmark 10-year US Treasury yield also stood around 4.96% on Monday, having pulled back from the critical 5% threshold markets generally interpret as negative for risk assets.
Fading inflation concerns and expectations for looser financial conditions long-term have supported bitcoin demand, Konstantinos Chrysikos, a director and head of customer relations at brokerage Kudo, wrote in a note.
“Bitcoin advanced to its highest level in several months as a broad retreat in global bond yields improved the backdrop for risk assets,” Chrysikos said.
4. Improving technical signals
Investors had been watching whether bitcoin would rally above the $80,000 mark, a key technical level the token struggled to meaningfully surpass for most of the past year.
Earlier this month, the coin also flashed a bullish golden cross, a widely watched technical signal that has historically preceded further price upside.
“The underlying setup had already been signaling the potential for higher prices. Our technical and on-chain indicators had been improving,” analysts at 10x Research wrote in a note on Monday, adding the firm had called for a “cycle low” back in August.
Bitcoin could still face challenges on the path higher. The token, which remains 32% below its October 2025 peak, is likely to be pressured by rising yields reflecting higher interest rate expectations, Chrysikos said.
“Markets still expect the Federal Reserve to raise interest rates once more before year-end and several times in the months that follow,” Chrysikos said, adding that “firmer” inflation readings going forward could limit bitcoin’s rally.
“The risk of sharp pullbacks remains,” Alex Kuptsikevich, chief market analyst at FX Pro, wrote in a note.
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