Bitcoin retreats from eight-month high after dizzying 13% rally

Bitcoin slipped to approximately US$85,500, a gain of around US$10,000 from last week's lows, following a rapid 13% rally over four days. In Asia, the leading cryptocurrency eased from a peak of $87,381 in the US session to around $85,500 in early Singapore trading, still up about US$10,000 from the week's lows. Despite reaching late-January levels, Bitcoin remains far below its October record of $126,000.

Analyst Rich Rosenblum of crypto market maker GSR believes traders view the pullback through $80,000 as evidence the bear phase is over, with momentum drawing sidelined capital back in. The Securities and Exchange Commission's approval of blockchain-based securities for US trading, announced on Thursday, has also boosted investor sentiment.

Additionally, falling oil prices and expectations of a summit between US President Donald Trump and Chinese President Xi Jinping have provided further support. Liquidations of long and short positions in digital assets have surged to more than $1 billion in the past 24 hours, with short bets accounting for about $840 million of that, according to Coinglass data.

BTC Markets analyst Rachael Lucas notes that Bitcoin cleared the top of its September range into a tight band of short liquidation levels, prompting a surge in buying. The options trading platform Deribit shows a strong bullish bias, with nearly 320,000 contracts for calls versus over 169,000 for puts. Spot US exchange-traded funds have seen significant inflows, and major corporate holder Michael Saylor recently purchased Bitcoin for the first time in three weeks.

However, challenges remain, including high crude oil prices, elevated US Treasury yields, and competition from AI-related stocks. Rosenblum emphasizes that the recent shift is driven by positioning rather than underlying fundamentals, as Bitcoin was under-owned and leaning short for much of the year.