Ethereum Clears $2,700 in a Short Squeeze as Bitcoin Hits an Eight-Month High, While 30-Year Mortgage Rates Stay Above 7%

Since the Senate's 49-50 vote killed the Digital Asset Market Clarity Act on September 15, crypto has done the opposite of what a failed regulation bill is supposed to do to a market. It ripped higher. The sector's market cap, which cleared $3 trillion earlier this week, climbed further to $3.03 trillion on Tuesday, according to BingX.

Bitcoin gained 5.4% on the day to $85,787.92, an eight-month high, per BingX. Benzinga separately reported Bitcoin is up 11% over the past week and sitting at a seven-month high as of a September 21 analysis. Either way, it's the strongest stretch for Bitcoin since Bitcoin briefly touched $80,000 back in the spring, and it remains roughly 30% below its all-time high near $126,000 set in October 2025, according to the Jerusalem Post.

Ethereum Does the Heavy Lifting

The bigger story Tuesday was Ethereum. ETH broke above the $2,700 resistance zone that had capped it for weeks, hitting $2,723.70, according to Coingabbar. That move triggered $182.87 million in liquidations over 24 hours, with $142.72 million of that coming from short sellers who bet the price would keep falling, Coingabbar reported.

This wasn't just short sellers getting squeezed out. Binance open interest in Ethereum futures climbed to roughly $6.58 billion, its highest level since January, which Coingabbar says signals new money entering the market rather than existing traders simply flipping positions. Crypto Potato's technical analysis puts the next resistance test at the $3,000 psychological level, with $2,700 now acting as the line that needs to hold to keep the breakout intact.

Tom Lee's firm BitMine reportedly bought $75 million worth of ETH, according to Coingabbar, and Lee has said he expects the fourth quarter to bring one of the strongest rallies in years. That's one investor's opinion, not a guaranteed outcome, and Coingabbar's own reporting flags it as such.

Saylor Is Back Buying

On the Bitcoin side, Michael Saylor's Strategy resumed purchases after a pause of several weeks, picking up another 950 coins for $75.7 million, according to the Jerusalem Post. The company now holds 846,000 Bitcoins. Spot Bitcoin ETFs also saw roughly $433 million in inflows, per BingX, a data point analysts watch closely because it distinguishes real buying from traders just closing out losing bets.

Bitfinex, cited by the Jerusalem Post, cautioned that for this breakout to become a durable trend, the market needs sustained spot-market buying, not just short covering. About $1.33 billion in leveraged positions were liquidated across the market in 24 hours during the initial leg of this rally, roughly $783 million of it in short positions, the Jerusalem Post reported. A lot of this move has been shorts getting forced out of losing bets, which pushes prices up mechanically. This is a different thing than new capital deciding Bitcoin is a good long-term holding.

Analyst Kevin Capital, in a September 21 podcast cited by Benzinga, now puts the odds at 90% to 95% that Bitcoin's roughly $60,000 low marked the cycle bottom, up from a prior 70% estimate. He pointed to Bitcoin closing above its 50-week moving average, a golden cross, and a bullish MACD crossover as signals. His next target zone is $93,000 to $100,000. But he also expects a pullback along the way, comparing the setup to Bitcoin's 2022-2023 recovery from $25,000 to $73,000, which wasn't a straight line up either.

The Other Interest Rate Story

While crypto traders were chasing an eight-month high, the 30-year fixed mortgage rate sat at 7.03% on Tuesday, down just 1 basis point from Monday, according to Zillow data reported by Yahoo Finance. The 15-year fixed rate fell 6 basis points to 6.50%. Refinance rates were higher across the board, with the 30-year refinance rate at 7.10%.

A short squeeze can hand crypto traders double-digit percentage gains in a week. A homebuyer shopping for a 30-year fixed loan is still looking at a rate that hasn't meaningfully moved in months, even after the Federal Reserve's rate cut last week and a pullback in oil prices that eased some inflation pressure. One market is running hot on leverage and momentum. The other is where ordinary families actually have to make their numbers work.

Whether Ethereum holds $2,700 and whether Bitcoin pushes into Kevin Capital's $93,000-to-$100,000 target zone will depend on whether the ETF inflows and Strategy-style corporate buying keep showing up, or whether this was mostly shorts capitulating into a squeeze. The Clarity Act, meanwhile, remains stalled in the Senate with no new cloture vote scheduled.