Bitcoin hits $87,395 as short squeeze drives record ETF inflows

Bitcoin ($BTC) climbed to an intraday high of $87,395 on September 21, marking its strongest price since January 29. The surge was fueled by a significant short squeeze that liquidated $647.9 million in bearish positions, pushing the asset to a seven-month high. The next milestone for traders is whether the Coinbase Premium Index can hold its recovery from negative territory to confirm sustained domestic buying pressure.

Positioning and Flow

The move in focus was driven by forced selling rather than organic accumulation. Coinglass data showed $746.6 million in total crypto liquidations over the past 24 hours, with shorts accounting for the vast majority at $647.9 million. This mechanical buying accelerated a rally where market-wide trading volume rose 39% to roughly $224 billion. The positioning implies that the initial leg up relied heavily on the crowded side of the market capitulating, a dynamic that often precedes volatility.

Institutional flows tracked the momentum. Spot Bitcoin exchange-traded funds absorbed $999 million on September 21, the largest single-day inflow since October 6, 2025. According to SoSoValue, this pushed total net assets to $110.1 billion from $102.5 billion. Corporate treasuries also stepped in; Strive bought 1,355 Bitcoin for approximately $107.7 million between September 14 and 18, lifting its holdings to 26,355 coins. Strategy resumed buying after a two-week pause, adding 950 Bitcoin to a total of 846,000 coins. However, September flows of roughly $1.3 billion across 14 sessions still trail the $3.5 billion recorded in August.

Signals to Watch

Two data points complicate the bullish narrative. Open interest across crypto derivatives rose 7.59% to about $156 billion, indicating that traders opened new positions rather than reducing risk even as shorts were flushed. Santiment flagged a contrarian sentiment signal, noting that synchronized confidence can develop near local tops. The Crypto Fear and Greed Index climbed to 78, labeled Extreme Greed, up from 69 a week earlier. Santiment recorded 954 mentions of bullish language versus 269 for bearish language, the largest spike since December 2024.

The second caution flag is the Coinbase Premium Index, which remains negative at -0.028. This gauge tracks buying pressure on US exchanges, and its current reading suggests that domestic appetite has not yet fully confirmed the rally. The coming sessions will determine if the move is a durable trend change or a spike that leaned too heavily on leverage to hold.