Bitcoin surged above $85,000 as a wave of short liquidations accelerated the cryptocurrency’s strongest advance since January.

Data from CryptoSlate showed BTC gained more than 5% over the past 24 hours to reach $85,193, extending its advance over the past 35 days to about 29% . The asset had eased to $84,545 as of press time after breaking through levels that had constrained its recovery for much of the year.

The rally caught bearish traders heavily exposed. CoinGlass data showed about $750.5 million of leveraged crypto positions were liquidated over the past 24 hours, with more than $648 million, or roughly 86%, coming from shorts. About 137,386 traders were liquidated during the period.

Bitcoin accounted for roughly $360 million of the liquidations, while Ethereum contributed nearly $171 million. The largest single liquidation was an $11.29 million BTC-USDT position on Binance.

The forced unwinding coincided with a sharp increase in aggressive buying across Bitcoin derivatives markets. CryptoQuant data showed net taker volume on Binance jumped from about $11 million to $618 million within an hour as European trading opened, signaling a sudden imbalance toward market buyers.

CryptoQuant attributed the shift partly to improving geopolitical sentiment, as investors responded to signs of potential diplomatic progress between the US and Iran. Oil prices also declined as markets weighed the prospect of talks, helping support a broader return of risk appetite despite continued tensions in the region.

Meanwhile, elevated leverage also amplified BTC's price movement . Bitcoin open interest stands at about $28.83 billion, close to its May record, leaving a large pool of derivatives positions vulnerable to further price swings.

That positioning can continue to work in Bitcoin’s favor if prices rise and additional short sellers are forced to cover. It also leaves the market exposed to a sharper reversal.