Bitcoin Hits $85,000 as Oil Drop and Short Squeeze Drive Rally

Bitcoin rose 5.3% to $84,702 after clearing the 50-week moving average for the first time in 45 weeks. This technical break triggered a $300 million short squeeze that lifted MicroStrategy shares by 7%.

The rally follows a four-day decline in Brent crude oil, which eased inflation concerns. Treasury yields dropped below 5%, making non-interest-bearing assets like crypto more attractive to traders.

Oil price drop lowers yields

Brent crude fell to $102, marking its longest losing streak in three months. Traders bought Treasuries in response, pushing the 10-year yield back under the 5% threshold seen in mid-September.

Lower yields reduce the opportunity cost of holding assets without cash flow. This shift caused investors to buy back crypto positions after the recent Federal Reserve rate hike.

Technical levels confirm bullish trend

Bitcoin closed the week at $81,159, above its 50-week average of $78,786. Galaxy Research notes that Bitcoin has reclaimed this level thirteen times since 2011.

In eleven of those thirteen instances, the price did not fall to new lows afterward. This historical pattern suggests the July 1 low of $57,700 may remain a firm floor for the market.

Market breadth expands across sectors

Ethereum gained 5.4% to $2,724, while XRP climbed 6.4% to $1.47. Solana rose 6.6% to $115, and Monero increased by approximately 13% during the same period.

Stocks linked to crypto, such as MARA and COIN, rose 6% and 5% respectively. According to yahoo.com, ETF inflows remained minimal at $6 million, meaning the rally depends on price momentum.