Bitcoin Breaks $96K as Fed Inquiry Sparks $590M Short Squeeze

Price Action & Volatility

Bitcoin (BTC) surged past $96,240 Wednesday, its highest level in two months, triggering a cascading liquidation of $590 million in short positions. The move marks a decisive break from weeks of range-bound accumulation. Buy-side pressure overwhelmed leveraged bears instantly. Data from trading desks indicates spot volumes accelerated alongside the breakout, forcing overleveraged shorts to capitulate.

The squeeze wiped out $590 million in bearish bets within hours. This leverage flush cleared resistance at $95,000, creating a vacuum that pushed prices higher. Open interest had crowded the short side, anticipating a rejection that never materialized.

The Macro Catalyst: Fed Under Siege

The rally coincides with a sharp escalation in friction between the White House and the Federal Reserve. Reports surfaced this week that the Department of Justice has issued subpoenas to Fed Chair Jerome Powell regarding internal renovation costs. Markets are interpreting the unprecedented legal pressure as a direct challenge to central bank independence. Traders are front-running the potential for a forced dovish pivot. The narrative is clear: political pressure on the Fed correlates with harder assets.

Institutional Flows & Altcoin Rotation

Corporate treasury demand continues to drain exchanges. Reports indicate major holder Strategy executed a $1.3 billion purchase, adding further scarcity to the supply side. This institutional floor is forcing market makers to chase price.

Capital is rotating. Ethereum (ETH), Solana (SOL), and Cardano (ADA) posted 8% gains, signaling a return of risk-on behavior. The breadth of the rally suggests this is not an isolated Bitcoin event. Investors are positioning for a broader liquidity cycle. The technical break above $96,000 opens the path to test the psychological $100,000 barrier.