Why Is Bitcoin Up Today? It Closed Above Its 50-Week Average for the First Time in 45 Weeks.
Bitcoin's first weekly close above its 50-week moving average in 45 weeks triggered trend-followers to buy and sparked $300 million in forced short liquidations.
Galaxy Research's Alex Thorn says reclaiming the 50-week average historically confirms bear market lows are in, with Bitcoin already up 29% over 35 days.
The bull signal only holds if Bitcoin closes above $85,000 by September 27, and a drop back below $78,786 would render the September 20 breakout a false one.
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Bitcoin (CRYPTO:BTC) wrapped up the week ending September 20, 2026, at $81,159, finally closing above its 50-week moving average of around $78,786. This marks the first time in 45 weeks that it has finished above this key indicator, according to Galaxy Research.
On September 21, BTC surged to $85,257 before easing to $84,702, reflecting a 5.3% increase in just 24 hours and a 10% rise over the past month. Despite this surge, the Bitcoin price is down about 3% since the start of the year, when it closed at $87,498 on December 31, 2025.
Two main factors contributed to this surge. First, the weekly close was above the 50-week average, which signaled trend followers to take action. The second was a short squeeze, where Bitcoin's rise pushed traders with short positions to cover their losses, resulting in a $300 million buying frenzy within an hour. Here's why Bitcoin is rising and what the Bitcoin price needs to hold to sustain this momentum.
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A 50-week moving average reflects the average closing prices over the last 50 weeks and is updated weekly. Traders view consecutive closes above this average as a sign of a strengthening market, while closes below suggest a downturn. Bitcoin last closed above this average in October 2025, coinciding with its record price of $126,198, and has been below it for 45 weeks.
With the close at $81,159 on September 20, Bitcoin was about 3% above this key line. Alex Thorn, head of research at Galaxy, noted that historically, reclaiming the 50-week average predicts the end of a bear market. Galaxy also counts a 29% gain over the 35 days to September 21, making the recent close significant.
On September 21, Bitcoin traded at $81,622 at 06:55 UTC. From 08:35 UTC, it rose sharply from $82,536 to $84,190, peaking at $85,257 by 09:35 UTC. However, by 11:00 UTC, it had fallen to $84,422 and traded at $84,702 as of the day's snapshot.
The push past $84,000 forced many traders holding short positions to buy back Bitcoin, triggering massive liquidations. When traders short Bitcoin, they borrow it and sell, hoping to buy it back at a lower price. If the price rises too high for these traders to cover their positions, exchanges buy the coin back at market prices.
According to CoinGlass, approximately $313 million of positions were liquidated in just one hour as Bitcoin broke past $84,000-96% of this loss came from short positions, totaling about $300 million.
These forced purchases drive the price higher, but once the shorts are cleared, the buying momentum typically stops. Consequently, Bitcoin fell back by $835 from its peak within 90 minutes. A drop in oil prices also played a role, but oil prices alone don't directly affect Bitcoin's value.
The wave of buying that bolstered Bitcoin's 2024 rally primarily came from spot Bitcoin ETFs. For the week ending September 18, these funds only netted about $6.2 million, as reported by SoSoValue and Farside.
This net figure includes fluctuations, as the funds took in $160 million on Monday, but lost $450 million on Tuesday and $296 million on Wednesday due to a Senate vote blocking the CLARITY Act. They recovered some of this loss with $160 million on Thursday and $433 million on Friday but ultimately ended the week in a wash, following a prior week with a $463 million outflow.
The key buyers needed to maintain momentum and turn this new movement into a trend weren't consistently present as of September 21, appearing only for one day. Additionally, the Federal Reserve's rate increase on September 16, its first since 2023, has already been priced into Bitcoin, which rose 11% over the following five days.
The next significant test will be on September 30 at the end of the quarter, where Bitcoin holds a comfortable margin over its last close of $58,524.
We believe the signal is reliable and that today's 21 move was borrowed. A weekly close above the 50-week average, after being below it for 45 weeks, is the strongest bullish signal Bitcoin has seen in nearly a year.
This helps explain the rush to cover short positions, which drove a $300 million surge in just one hour. However, forced buying typically stems from other traders' losses rather than new investments, and Bitcoin struggled to hold the $85,000 level on its first attempt.
The weekly close at $81,159 gave trend-followers a reason to buy and prompted those betting against it to cover their positions, clashing with $300 million in crowded short positions near $85,000. If Bitcoin closes above $85,000 during the week of September 27, it solidifies this upward trend, with January's high of $94,820 potentially in sight. Conversely, if it closes below $78,786, we may conclude that the September 20 signal was just noise.
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