Bitcoin Soars Past $122K as Policy Shift, Short Squeeze, and Momentum Ignite Rally

Bitcoin briefly broke above $122,000, driven by U.S. policy optimism, a massive short squeeze, and strong technical momentum. The surge brings the all-time high back into focus.

Bitcoin experienced a sharp upward move in the past 24 hours, gaining 3.35% to briefly push past the $122,000 mark before easing slightly. The surge outperformed the wider cryptocurrency market’s 2.34% rise, fueled by a mix of bullish policy signals, forced short-covering, and strong technical underpinnings.

After starting the week quietly around the $118K zone, Bitcoin began to gather steam during early Asian trading hours, first breaching $119K and then accelerating rapidly above $120K. The rally carried it over the $122K threshold — just shy of its July 2025 record high — before profit-taking caused a slight pullback. As of the latest data, BTC was holding just under $122,000, retaining most of its gains.

A major catalyst emerged from Washington when President Trump directed the U.S. Labor Department to examine the inclusion of cryptocurrency investment options within 401(k) retirement plans. The announcement sparked speculation about a wave of future institutional capital, similar to the inflows triggered by the launch of spot Bitcoin ETFs in 2024, which saw $253 million in net inflows last week alone.

Adding fuel to the rally, more than $50 million in short positions were liquidated in under two hours, forcing traders to buy back BTC and accelerating the price surge. On the technical front, Bitcoin remains in a bullish configuration, supported by a positive MACD crossover, an RSI that is still well below overbought territory, and firm support around $117K. Analysts suggest that if the current momentum holds, a retest of Bitcoin’s all-time high could happen sooner than expected.

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