Why Is Crypto Up Today? Oil Prices Drop, Short Sellers Squeezed, and Bitcoin Reclaims Key Level After 45 Weeks

Bitcoin (CRYPTO:BTC) is trading at $84,702, up 5.3% in the past day after hitting $85,000 for the first time since January. Ethereum (CRYPTO:ETH) rose 5.4% to $2,724, XRP (CRYPTO:XRP) climbed 6.4% to $1.47, and Solana (CRYPTO:SOL) rose 6.6% to $115.

Meanwhile, BNB (CRYPTO:BNB) is up 3.9% to $781, Zcash (CRYPTO:ZEC) gained 4.5% to $1,505, Hyperliquid (CRYPTO:HYPE) rose 4.7% to $95, and Monero (CRYPTO:XMR) increased by about 13%. Overall, the entire crypto market is in the green.

Just days earlier, on September 16, the Fed raised interest rates, a day after the Senate blocked the CLARITY Act, while Bitcoin was hovering around $76,000. So, what changed? The answer lies in three main factors that developed between September 18 and September 21: a drop in oil prices, a strong weekly close for Bitcoin, and a surge in short sellers.

Oil Fell for a Fourth Day and Pulled the 10-Year Yield Below 5%

Brent crude oil fell for the fourth consecutive day on September 21, reaching about $102. This is the longest losing streak for oil in three months, having peaked at $108 in mid-September. Oil is a key factor in inflation, and when its price drops, traders believe inflation will ease. 

This leads them to buy Treasuries, causing the yield on 10-year bonds to fall. The yield had climbed above 5% in mid-September but dipped back below it as oil prices dropped.

A yield above 5% makes non-interest-bearing assets like cryptocurrencies seem expensive, while a fall below 5% makes them look more attractive. Therefore, traders who sold crypto after the Fed’s rate hike began buying back as oil prices fell, causing the biggest rebounds in the coins that had dropped the most.

Equity futures mirrored this trend, with S&P 500 contracts rising more than half a percent and Nasdaq 100 contracts gaining nearly 1% before the New York market opened on September 21. Crypto trades 24/7, allowing it to capture this buying momentum on the morning of September 21 while stocks awaited their opening.

Bitcoin Closed the Week Above Its 50-Week Average for the First Time in 45 Weeks

Bitcoin ended the week of September 20 at $81,159, just above its 50-week moving average of $78,786, according to Galaxy Research. The 50-week moving average is a tool traders use to identify market trends, serving as a dividing line between bull and bear markets. Bitcoin last closed above this line on November 9, 2025, and has spent 44 weeks below it since.

Alex Thorn from Galaxy has noted that Bitcoin has reclaimed this average 13 times since 2011, and in 11 out of 13 instances, it did not drop to new lows afterward. Based on this history, the recent close suggests that the low from July 1, around $57,700, could hold.

Traders took action quickly. Those who follow this moving average bought at the close on September 20 and again at the open on September 21, pushing Bitcoin from $81,159 to $85,000 in a day. The strong resistance at $82,000, which had held firm for four previous attempts since August 25, finally broke.

Short Sellers Fueled the Bitcoin Price Rise to $85,000 While ETF Buyers Stayed Away

The climb past $84,000 was largely driven by short-position liquidations. Exchanges liquidated approximately $262.30 million in shorts within an hour as Bitcoin passed this level, according to CoinGlass. Of that total, about $218.55 million came from Bitcoin shorts, with just $9.53 million coming from long positions. Across the day, exchanges wiped out about $648 million in bearish bets.

A short liquidation occurs when a trader who bet against the market runs out of collateral, forcing the exchange to buy back the asset and close the position. This buying pushes the price higher, which can trigger further liquidations in a cycle that continues until most shorts in that price range are cleared. Glassnode highlighted the $83,000 to $86,000 price range as a hotspot for these positions, allowing Bitcoin to cover that zone in mere hours.

XRP experienced similar momentum. Funding rates for XRP perpetual contracts, which ensure futures prices stay aligned with cash prices, had been negative for over a week, meaning short sellers were compensating long holders. Once the price began to rise, these shorts faced the most pressure, contributing to XRP’s 6.4% gain compared to Bitcoin’s 5.3%.

However, significant institutional buyers were largely absent during this rally. Spot Bitcoin ETFs saw a net inflow of only $6.21 million for the week ending September 19, following significant outflows of $746 million on September 15 and 16, and a small rebound of $592.5 million on September 17 and 18. This latest surge to $85,000 occurred without the usual support from institutional funds that had previously driven August’s growth.

Does the September 21 Crypto Rally Hold?

The crypto market is currently rallying, fueled by a fourth straight day of lower oil prices, which helped push the 10-year yield below 5%. Bitcoin also closed the week above a key level it hadn’t held for 45 weeks, and about $648 million in short positions were forced to close. While the first two factors can have lasting effects, the third is a one-time event, and recent ETF activity added only $6.21 million for the week ending September 19.

The rally’s sustainability hinges on oil prices and the weekly close. If oil prices remain low through the quarter close on September 30 and Bitcoin stays above $81,159, the price could rise toward $86,000. Conversely, if oil prices rise or the market doesn’t meet expectations, a break below the $81,159 weekly close could suggest the recent rally was temporary.

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