Bitcoin and cryptocurrency-linked equities continued their upward momentum at the start of this week, following a breakout from a recent trading range driven by escalating investor concerns over inflation and fiscal deficits. On Monday, the flagship cryptocurrency climbed roughly 2%, trading near $80,000—a level not seen since May—while Ethereum advanced about 2% to hover around $2,500, marking its highest point since January.

Stocks with substantial crypto treasuries moved in tandem with the digital assets. Strategy and Strive gained 2% and 4%, respectively, while Bitmine and Sharplink, both holding Ethereum reserves, rose 3% and 2%. Market participants are now watching whether this rally signals a turning point for Bitcoin, which has endured a prolonged slump since October, just ahead of the coin's historically bullish seasonal window.

Bitcoin's 2026 trajectory

BTIG's Jonathan Krinsky highlighted in a Monday note that Bitcoin experienced a comparable pattern in January 2023, surging roughly 20% in three days and breaking above a downtrend. However, that advance subsequently faded, with the asset retracing toward its 200-day moving average before finding support. The current upswing stems from a macro-driven shift last week that triggered a massive short squeeze, propelling Bitcoin more than 20% higher over three sessions—the largest such gain since 2023. The catalyst came after the U.S. Treasury signaled it would double its purchases of long-dated bonds, temporarily pushing yields lower and boosting demand for risk assets like Bitcoin alongside scarce commodities such as gold.

Institutional interest has also resurfaced, with spot Bitcoin ETFs recording $1.92 billion in inflows last week—the strongest weekly intake since October, when Bitcoin last reached its cycle peak. Concurrently, more than $4 billion in bearish crypto positions were liquidated as prices climbed. Adding further tailwind, Bridgewater Associates founder Ray Dalio warned that major economies could face debt crises in the coming years and advised investors to hold a "small amount" of Bitcoin, reinforcing the positive sentiment surrounding digital assets.