Bitcoin climbs to 7-month peak as cautionary signals persist

On Monday, Bitcoin (BTC) surged to a seven-month high, lifting market sentiment and institutional confidence along with it.

The peak followed a key bottom signal from Bitcoin. Still, two important signals cast doubt on whether the rally can be sustained.

Bitcoin Surges to a Level Last Seen In January

On September 21, Bitcoin reached an intraday high of $87,395, the strongest level since January 29. At press time, the asset traded at $85,326, up 4.90% over 24 hours.

The advance came after a weekly close above the 50-week moving average, a pattern that has historically indicated bear-market lows are behind.

A short squeeze provided most of the momentum. Coinglass reported $746.6 million in crypto liquidations over 24 hours, of which $647.9 million were short positions.

Market-wide trading volume increased 39% to about $224 billion, as forced buying accelerated the climb.

Sentiment and Institutional Flows Followed the Price

Sentiment tracked the price movement. Santiment noted the biggest jump in bullish commentary since December 2024: social volume for bullish language hit 954 mentions, versus 269 for bearish.

The Crypto Fear and Greed Index rose to 78, classified as Extreme Greed, up from 70 on Monday and 69 a week prior.

Corporate treasuries joined in with retail excitement. Strive acquired 1,355 Bitcoin for roughly $107.7 million from September 14 to 18, far exceeding the 469 coins bought the week before. That purchase lifted Strive's total holdings to 26,355.

Strategy re-entered after a two-week break. The firm reported buying 950 Bitcoin, pushing its overall holdings to 846,000.

Spot Bitcoin ETFs mirrored the trend. SoSoValue said the funds took in $999 million on September 21, the biggest daily inflow since October 6, 2025, lifting total net assets to $110.1 billion from $102.5 billion.

However, September inflows remain behind August. So far this month, the funds have drawn about $1.3 billion over 14 sessions, versus $3.5 billion in August.

What the Derivatives Data and the Coinbase Premium Show

Two signals trouble the optimistic outlook. First, leverage. Open interest in crypto derivatives climbed 7.59% to roughly $156 billion, despite short liquidations, indicating traders added new positions instead of cutting risk.

Santiment also pointed to the contrarian sentiment indicator.

“Crypto often punishes crowded expectations. Extreme fear can appear near exhaustion lows, while synchronized “higher from here” confidence can develop near local tops. The current sentiment spike doesn’t guarantee a reversal, but risk is less attractive now than when the crowd was fearful last week,” it