Bitcoin Surpasses $85K After Sharp Drop in Smaller Wallets and Short Squeeze
According to Santiment data, nearly 69,500 smaller Bitcoin wallets disappeared between July and August as prices declined. This drop occurred before Bitcoin rebounded above $85,000 for the first time since January 2026. The recovery was fueled in part by a short squeeze that liquidated approximately $648 million worth of bearish positions over a single day. The surge also coincided with rising fear-of-missing-out (FOMO) sentiment, which Santiment reported as the highest since early 2024. While this suggests renewed bullish enthusiasm among traders, it may indicate crowded trading conditions rather than sustainable demand. Additionally, total crypto volume increased by 39%, and falling oil prices were cited as a factor supporting broader risk appetite. Despite these positive signs, market analysts caution that the rally could be volatile if leveraged positions unwind or expectations fail to materialize.
Topics: Bitcoin FOMO price rebound short squeeze wallet activity