Bitcoin (BTC) surged to a 7-month high on Monday, lifting market sentiment and institutional confidence with it.

The peak arrived after Bitcoin flashed a key bottom sign. Yet, two key signals raise questions about whether the rally can sustain itself.

Bitcoin Surges to a Level Last Seen In January

Bitcoin climbed to an intraday high of $87,395 on September 21, its strongest price since January 29. The asset traded at $85,326 at press time, up 4.90% over 24 hours.

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The rally followed a weekly close back above the 50-week moving average. This has historically served as a signal that bear-market lows are in.

A short squeeze supplied much of the fuel. Coinglass data showed $746.6 million in crypto liquidations over 24 hours, with shorts accounting for $647.9 million.

Market-wide trading volume rose 39% to roughly $224 billion as that forced buying accelerated the climb.

Sentiment and Institutional Flows Followed the Price

Sentiment moved with the price. Analytics firm Santiment recorded the largest spike in bullish commentary since December 2024, with social volume tied to bullish language reaching 954 mentions, compared with 269 for bearish language.

The Crypto Fear and Greed Index climbed to 78, or Extreme Greed, from 70 on Monday and 69 a week earlier.

Corporate treasuries stepped up alongside retail enthusiasm. Strive bought 1,355 Bitcoin for about $107.7 million between September 14 and September 18, well above the 469 coins it acquired the previous week. The purchase lifted Strive’s holdings to 26,355 Bitcoin.

Strategy returned to the market after a two-week pause. The company disclosed a purchase of 950 Bitcoin, which took its total to 846,000 coins.

Spot Bitcoin exchange-traded funds (ETFs) told a similar story. According to SoSoValue, the funds absorbed $999 million on September 21, their largest single day since October 6, 2025, with total net assets rising to $110.1 billion from $102.5 billion.

September flows still trail August, however. The funds have taken in roughly $1.3 billion across 14 sessions this month, compared with $3.5 billion in August.

What the Derivatives Data and the Coinbase Premium Show

Two signals complicate the bullish case. The first is leverage. Open interest across crypto derivatives rose 7.59% to about $156 billion, even as shorts were liquidated. This suggested that traders opened new positions rather than reducing risk.

Santiment also flagged the contrarian sentiment signal.

“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 said.

The second signal is US spot demand. The Coinbase Premium Index remains negative at -0.028, though it has recovered from deeper readings earlier in September.

The gauge tracks buying pressure on the US exchange, and it needs to hold that recovery to confirm domestic appetite.

The coming sessions will tell whether this marks a durable trend change or a move that leaned too heavily on a short squeeze to hold.

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Source: BeInCrypto