Bitcoin Breaks $79,000, Bull Market Underway? Experts Say "Situation Is Complex"

Bitcoin traded near $79,000 on Tuesday, with the market still debating whether the recent sudden 20% surge was driven primarily by short covering or marks a durable cyclical bottom.

Have Three Factors Created "Dry Tinder" for Bitcoin?

In a panel interview with Scott Melker on Monday, Galaxy Digital Head of Research Alex Thorn highlighted the combination of improved inflows, severely oversold conditions, and forced liquidations that helped push Bitcoin toward $80,000.

According to Thorn's data, Bitcoin spot ETFs attracted roughly $1.9 billion in weekly net inflows, the strongest performance since October 2025. Combined with inflows into other crypto products, over $2.6 billion flowed back into the asset class.

The rally also caught traders holding large short positions off guard, triggering over $2 billion in short liquidations.

Thorn noted that this positioning was particularly striking because traders had accumulated significant short exposure near Bitcoin's 52-week low, when volatility was at historic lows.

This combination created "dry tinder" that could trigger sharp volatility once a catalyst emerged.

Treasury Purchases — The Key Catalyst

That spark may have come from the U.S. Treasury's plan to expand purchases of long-term government bonds.

While the program is technically neither quantitative easing nor formal yield curve control, panelists argued that the signal's significance outweighs the label itself.

Bitcoin's reaction was notable, as it significantly outperformed gold following the announcement, reigniting its "digital gold" narrative.

The rally also brought institutional demand back into focus. Thorn argued that investors already heavily exposed to AI and mega-cap tech stocks may increasingly turn to Bitcoin, seeking assets with greater upside potential.

Is $58,000 Bitcoin's Bottom?

Thorn said several recent market characteristics resemble previous Bitcoin bear market bottoms.

"I personally don't think we'll retest $58,000 and make a lower low," Thorn said. But he is not yet ready to declare a new bull market.

Bitcoin is trading between support at the 200-week moving average and resistance at the 50-week moving average, with roughly $82,000 emerging as a key breakout level.

Thorn noted that in about 11 of the roughly 13 instances where Bitcoin reclaimed the 50-week moving average from below under bear market conditions, the cyclical bottom had already been established.

While he believes a rejection could push Bitcoin back into the $60,000 range, a sustained breakout above $82,000 would strengthen the case for a structural trend reversal and a $58,000 cyclical bottom.

Bloomberg's Mike McGlone remains bearish, viewing Bitcoin near $78,000 as a selling opportunity given its high correlation with risk assets and vulnerability to increased stock market volatility.