Bitcoin briefly climbed above $85,000 on September 21, 2026, notching its highest level since January 2026, as the recovery from last week's selloff accelerated and a sharp rise in short-position liquidations added momentum to the advance.

The largest cryptocurrency gained more than 5% over 24 hours, briefly trading above the $85,000 mark before easing back.

#Bitcoin back to $85K. $BTC pic.twitter.com/zcxGtc2sAJ — BitKE (@BitcoinKE) September 21, 2026

The latest leg higher followed a steady recovery from around $75,000 on September 15, 2026, to above $80,000 by September 18, 2026. Despite the rebound, bitcoin remains about 32.5% below its October 2025 record high near $126,000, although its year-to-date loss has narrowed to less than 3%, according to industry reports.

Short Sellers Bear the Brunt as Liquidations Top $750 Million

Liquidations occur when exchanges forcibly close leveraged positions after losses exceed a trader's collateral. More than $750 million in crypto positions were liquidated over the previous 24 hours, with short positions — trades that profit when prices fall — accounting for $648.3 million of the total, according to data from CoinGlass. Because closing a short requires buying the asset back, waves of forced short closures can amplify upward pressure on price, a dynamic commonly described as a short squeeze. Bitcoin positions represented $360.7 million of the liquidations, including a single $11.3 million position closed on Binance's BTCUSDT market.

Broader Crypto Market Rallies With Global Risk Assets

The wider crypto market also participated in the rally. Ether rose about 5.6% over 24 hours to around $2,717, XRP gained 7.8% to $1.49, and Solana climbed 7.2% to approximately $115.75.

The move came as global risk assets strengthened more broadly. Asian and European equities advanced during the session, while U.S. stock futures also pointed higher. Lower oil prices helped ease pressure on markets following the Federal Reserve's interest rate hike the previous week, and investors kept a close watch on developments in U.S.-Iran diplomacy as well as a planned meeting between U.S. President Donald Trump and Chinese President Xi Jinping.

Spot Bitcoin ETFs Return to Net Inflows

The rally also coincided with renewed buying in U.S. spot bitcoin exchange-traded funds, which hold bitcoin directly and trade on traditional stock exchanges, making their daily flow data a closely watched indicator of institutional demand for the asset. The funds recorded $433 million in net inflows on September 18, 6, helping them finish the week with a modest $6.2 million net inflow after substantial withdrawals earlier in the week.

Regulators Press Ahead Despite CLARITY Act Setback

The advance comes amid fresh moves by U.S. regulators to advance cryptocurrency and blockchain rules, even after the Senate failed to move forward with the CLARITY Act. The regulatory developments offer a path forward for parts of the crypto industry even as comprehensive legislation remains stalled in Congress. The U.S. Securities and Exchange Commission (SEC) has said it intends to continue its crypto rulemaking agenda regardless of the CLARITY Act's progress.

Taken together, the combination of clearer regulatory direction, renewed ETF buying, and forced covering of bearish positions has helped push bitcoin back toward levels last seen at the start of the year, although the asset remains well below its record high.