Bitcoin tops $80,000 for first time since May

Bitcoin briefly traded above $80,000, its highest level since mid-May, before slipping back below that level later in the session. Ether and most major tokens moved higher alongside it, extending a rally that has taken bitcoin from around $62,000 a week earlier.

Futures open interest fell to roughly 587,600 bitcoin, its lowest level in nearly five months, even as the price rose, a pattern consistent with short positions being closed out rather than fresh buying driving the move. Crypto-margined bitcoin futures, once nearly the whole market, now make up about 12 percent of open interest. Billions of dollars in short positions have been liquidated over the course of the rally.

A rally driven mainly by short sellers closing positions rests on shakier ground than one built on fresh buying, since it can unwind just as quickly once the forced sellers are gone.