Why Is the Crypto Market Up? Bitcoin Shorts May Hold the Answer

TLDR

• Bitcoin rose by more than 3% from early lows and traded near $87,423.
• The crypto market capitalization increased by nearly 3 percent to $2.97 trillion.
• XRP gained more than 7% and reached 2.07 dollars during the rally.
• ZEC jumped nearly 20% and extended its 2025 gains to over 965%.
• Analyst Ali Martinez confirmed Bitcoin entered extreme oversold territory on the RSI.

The crypto market rebounded today as Bitcoin reversed early losses, triggering a broader rally in digital assets. Bitcoin rose by over 3% from its daily lows, with XRP and ZEC posting strong gains. The total crypto market capitalization climbed nearly 3% to $2.97 trillion, according to CoinMarketCap.

Bitcoin Pushes Higher After Oversold Signal

Bitcoin traded around $87,423 after gaining 3.21% from earlier lows, reacting to oversold RSI conditions. Analyst Ali Martinez confirmed Bitcoin dipped into “extreme oversold territory” before buyers stepped in. He shared a Glassnode chart showing similar past events in 2023 and March 2025.

The upward move followed remarks from MicroStrategy chairman Michael Saylor, who reiterated the firm’s long-term position on Bitcoin. That further supported bullish momentum as traders bought the dip. Martinez suggested that RSI-driven bounces have historically led to short-term gains.

Meanwhile, Bitcoin derivatives showed signs of stress as shorts increased exposure. Analyst Ted Pillows noted, “Financing rates on Bitcoin have turned negative as prices climb.” This suggests short traders expect a pullback and are increasing leverage.

However, open interest dropped sharply before stabilizing slightly. This drop reflected liquidations that removed overcrowded long positions. Pillows said a potential short squeeze could drive Bitcoin higher in the near term.

XRP Breaks Out With Over 7% Daily Gain

XRP outpaced most top assets by jumping more than 7% to reach $2.07 by the day’s close. This gain came as buyers responded to easing selling pressure across the crypto market. Traders speculated on further upside as short-term momentum improved.

XRP’s breakout aligned with broader trends seen across top 20 tokens. Assets like ETH, ADA, SOL, and BNB also posted positive returns. These gains reflected reduced liquidation risk and increased stability in the derivatives space.

The Fear and Greed Index remained at 13, still signaling extreme fear. Despite the rally, sentiment remained fragile amid recent volatility. Traders appeared selective, favoring assets with stronger technical patterns.

XRP showed one of the more durable recoveries among major altcoins. Its technical setup suggested continued buying interest near short-term support. Short-term traders rotate back into higher-volume tokens like XRP.

ZEC Extends 2025 Surge With Nearly 20% Jump

Zcash (ZEC) surged nearly 20% today, continuing its strong performance throughout 2025. Its year-to-date gains exceeded 965%, putting it among top performers. The privacy coin rallied as oversold conditions across the crypto market triggered fresh demand.

ZEC-led privacy-focused tokens benefited from renewed investor interest and low exchange supply. It outperformed both mid- and large-cap peers today. Technical indicators showed intense upward pressure fueled by low funding rates.

Derivatives data showed liquidations across the board, totaling around $218 million in 24 hours. These liquidations helped clear overcrowded positions, enabling new trades. Short sellers faced losses as ZEC extended gains.

Market participants viewed ZEC’s trend as supported by structural demand shifts. Funding rates stayed neutral, offering no immediate headwinds. Price momentum may continue if privacy tokens remain in focus.

Derivatives Liquidations Support Crypto Market Rally

Liquidations across derivatives markets helped drive the broader crypto market rally. CoinGlass reported $218 million in liquidations in the past 24 hours. This wiped out over-leveraged positions and reduced downward pressure.

Bitcoin’s funding rate turned negative as shorts attempted to profit from a pullback. Analysts said this shift reflects aggressive bearish positioning. If prices rise further, a short squeeze could accelerate gains.

The crypto market remains volatile, with the Fear and Greed Index stuck in extreme fear territory. Traders remain alert for any reversal. However, the short-term trend favors continued upside if pressure on shorts persists.

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