Bitcoin Rally Pushes Crypto Market Back Above $3 Trillion

Bitcoin’s rally pushed the digital-asset market back above $3 trillion for the first time since January. The rebound came with a warning: traders are building up leveraged positions that can magnify losses if prices turn.

The market has added more than $740 billion since the US Treasury announced larger buybacks of long-term bonds in August, CoinGecko data showed. Bitcoin climbed almost 8% on Monday to $87,381, its highest level since January, before retreating to $85,093 on Tuesday.

Trading in perpetual futures, contracts without a set expiry date, has grown alongside prices. Open interest across those contracts approached $160 billion, the highest since late October, according to CoinGlass data cited by Bloomberg.

More than $920 million in bearish bets were liquidated on Monday as prices rose. But open interest kept increasing, suggesting that new leveraged positions replaced some of the shorts forced out of the market.

That matters because borrowed positions can be closed automatically when prices move against traders. A quick drop can trigger forced selling from leveraged buyers, while another rally can pressure traders betting against prices.

Investor demand has also picked up. US spot Bitcoin exchange-traded funds drew $999 million on Monday, their largest daily net inflow since October, and added $593 million across Thursday and Friday last week.

Other tokens joined the advance. Privacy-focused Zcash rose sharply, while HYPE, the token linked to the Hyperliquid network, reached a record high.

The next test is whether buyers keep purchasing crypto at current prices. Rachael Lucas, an analyst at BTC Markets, told Bloomberg she would watch for spot demand to replace buying driven by traders closing short bets.