Bitcoin reaches a two-month peak at $96,240 amid a rally in altcoins and a squeeze on short positions

Bitcoin Surges to Two-Month Peak as Altcoins Rally

On Tuesday, Bitcoin briefly climbed to $96,240, marking its highest value in two months, as investors shifted their attention to alternative cryptocurrencies.

Within just four hours, over $500 million in futures positions were liquidated after Bitcoin surpassed the significant $94,500 threshold—a level it had previously failed to break on three separate occasions: January 5, December 10, and December 3. This move triggered heightened activity across the market.

Currently, open interest in Bitcoin futures stands at $30.6 billion, down from a daily high of $31.5 billion. This decline suggests robust spot market buying, while derivatives traders are closing out short positions.

Altcoins Outperform as Market Sentiment Shifts

Before Bitcoin’s breakout, the privacy-focused cryptocurrency DASH surged to its highest price since 2021 on strong trading volume, potentially boosting confidence in other digital assets.

The rally has spread across the altcoin sector: optimism (OP) has jumped 18.5%, and both TIA and PENGU have gained 14% over the past day, reflecting renewed enthusiasm among traders after a period of correction.

Bitcoin’s market dominance has also slipped, dropping from 59.3% on December 24 to 58.6%, as several altcoins outperform the leading cryptocurrency.

The CoinDesk 80 Index (CD80), which tracks 80 tokens excluding Bitcoin, has risen 8% so far today, while the CoinDesk 20 (CD20) trails at 6.35%.

What’s Driving the Market Upswing?

Despite concerns that Bitcoin lacked positive momentum in 2026, the market has rebounded, catching short sellers off guard.

One explanation is that the $19 billion liquidation event in October left Bitcoin and the broader crypto market in an oversold state, with many assets undervalued. However, after a challenging period, traders were hesitant to re-enter the market.

Instead of trading cryptocurrencies, many investors shifted their focus to traditional safe havens like gold and silver, and in South Korea, to AI-related stocks, reflecting a broader trend among retail traders.

Recently, the crypto fear and greed index has frequently dropped to "extreme fear," a level often seen as a buying opportunity when overall sentiment is pessimistic.

Short-Term Outlook for Bitcoin

• In the near future, Bitcoin may test the $94,500 level as a new support zone before potentially advancing toward $99,000, which previously served as support from June to November and now represents a resistance point.
• If Bitcoin fails to maintain the $94,500 level, its price could retreat to the $85,000–$94,500 range.