Bitcoin Reclaims $91,000 as Short Liquidations Drive Market Momentum

Bitcoin climbed above the $91,000 threshold on Sunday, marking a significant recovery in market sentiment for the start of 2026. This surge was fueled by a combination of high-volume short liquidations and reactions to shifting geopolitical narratives.

The broader digital asset market followed suit with Ethereum and Solana recording notable weekly gains. 

Investors are now assessing whether this breakout establishes a sustainable foundation for further growth in the first quarter of the year.

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Bitcoin Price: Factors Influencing the Market Breakout

A primary catalyst for the price jump was a massive short squeeze that triggered approximately $180 million in futures liquidations. 

Data indicates that $133 million of these liquidations were short positions, forcing traders to buy back Bitcoin and accelerating the upward move.

External events also played a role as market participants reacted to statements regarding U.S. policy toward Venezuela. 

While these developments are viewed by analysts as volatility catalysts rather than fundamental shifts, they contributed to a risk-on atmosphere.

The thin liquidity characteristic of the early new year amplified these price moves across exchanges. 

In low-volume environments, even modest spot buying can trigger stop-loss orders in the futures market and lead to sharp price fluctuations.

Read more: Will the Bitcoin Sell Off Continue?

Conclusion

Bitcoin's ability to reclaim $91,000 signals a potential shift from the cautious sentiment observed throughout the previous month. 

With substantial ETF inflows and an improving Fear and Greed Index, the infrastructure for a larger move appears to be strengthening.

The focus now remains on whether Bitcoin can maintain its position above the $90,000 support level. 

If liquidity continues to flow into digital asset products, the pathway toward the six-figure mark could become the primary narrative for the remainder of the quarter.

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FAQ

Why did the Bitcoin price increase on Sunday?

The increase was driven by $180 million in futures liquidations and geopolitical volatility surrounding U.S. comments on Venezuela.

What is a short squeeze in the crypto market?

A short squeeze occurs when the price of an asset rises unexpectedly, forcing traders who bet on a price decline to buy back their positions.

How did other cryptocurrencies perform during the rally?

Ethereum rose to approximately $3,150 while Solana and XRP also recorded gains ranging from 8 percent to 10 percent for the week.

What impact did ETF inflows have on the market?

Recent data shows that crypto ETFs recorded $645.8 million in inflows, suggesting a return of institutional interest in digital assets.

What are the price predictions for Bitcoin in Q1 2026?

Some market analysts are targeting a price of $100,000 during the first quarter if current momentum and institutional demand remain consistent.