The cryptocurrency market experienced its long-awaited boom today. Bitcoin, the leading cryptocurrency, broke through all psychological and technical resistance levels, surpassing $116,000 and reaching an all-time high. Bitcoin, which has been on a steady rise throughout 2025, doubling its value, stands out with this latest rally not only as a numerical success but also as the result of a “perfect storm” created by global economic policies, political rhetoric, and market dynamics.
So, what are the fundamental drivers behind this historic surge that has set the markets ablaze? According to experts, when the pieces of the puzzle come together, a clear picture emerges.
Why did Bitcoin rise?
The primary driver of this rise was the anticipated interest rate cuts from global central banks. Increasing signals that the era of fighting high inflation is coming to an end and the preparations of many banks, especially the US Federal Reserve (Fed), to cut interest rates have driven investors away from traditional savings and toward riskier but potentially high-yield assets like Bitcoin.
In parallel, the weakening of the US dollar and the increasingly crypto-friendly regulations adopted by the current administration in recent months have created a safe haven for institutional and individual investors. This environment has positioned Bitcoin as a haven against macroeconomic uncertainties, moving it beyond a purely speculative instrument.
As markets broke records, US President Donald Trump took the stage, declaring the rally a triumph of his own economic policies. In a statement on his social media platform, Truth Social, Trump declared, “Markets are through the roof, just as I promised!” Attributing this momentum to the tariffs he imposed on imported goods, which he argues protect the American economy, Trump sent a clear message to the Fed to continue this success: “Lower interest rates without further delay!”
Trump’s statement was interpreted as both a political move to capitalize on the rally and a reaffirmation of the vital importance of interest rate cuts for the markets.
However, there’s another technical reason behind the sharp and rapid rally: the Short Squeeze.
According to data from crypto data platform Coinglass, over $416 million in short positions were lost in the last 24 hours to investors who opened short positions anticipating a market decline. When prices began to rise against their expectations, these investors were forced to close their positions to avoid further losses.
This created a massive wave of panic buying in the market. Millions of dollars in forced buy orders fueled the already rising price, propelling Bitcoin to record highs. The liquidation of hundreds of investors who had been “backed out” while anticipating a decline further multiplied the gains of those who had been anticipating a rise.
