Bitcoin staged a dramatic comeback on May 14, surging more than $2,000 in four hours to break above $81,800 and briefly touch $82,000. The sharp reversal came after the cryptocurrency had struggled for most of the day to reclaim the $80,000 level, following a sell-off triggered by hotter-than-expected U.S. producer price inflation data.
According to market data, Bitcoin was trading at $81,500 at press time (1:00 PM EDT), up 3.5% in the past 24 hours. Its market capitalization rose to $1.63 trillion, helping lift the total crypto market cap to nearly $2.8 trillion. The abrupt rally led to a massive deleveraging event: over the past 24 hours, $236 million worth of leveraged positions were liquidated across all cryptocurrencies, with short positions accounting for $145 million. In contrast, long liquidations totaled just $14 million.
CLARITY Bill and Trump's China Trip Fuel Risk-On Mood
The primary catalyst for Bitcoin's bounce was news that the U.S. Senate Banking Committee is advancing the CLARITY bill, a legislative effort aimed at providing clear regulatory guidelines for digital assets. Market participants viewed this as a significant de-risking event that could encourage institutional capital to enter the space.
Simultaneously, reports that President Donald Trump is preparing for a highly anticipated visit to China ignited a wave of optimism across risk assets. Many investors hope the summit will help resolve ongoing trade tensions and potentially persuade Iran to reopen the Strait of Hormuz, which has been blocked amid rising Middle East tensions. The blockade has driven up energy costs and contributed to sticky inflation.
Earlier in the week, Bitcoin had fallen to $78,704 as the Producer Price Index (PPI) rose more than expected, reflecting the inflationary impact of the Middle East conflict. However, the positive geopolitical narrative quickly reversed sentiment. Still, energy analysts caution that even if a deal is reached today, oil markets may not fully recover until 2027 due to the scale of the disruption.
Polymarket Shows 56% Probability of Bitcoin Reaching $85K in May
The rebound has reignited bullish bets on Bitcoin. Polymarket, a decentralized prediction platform, now shows a 56% probability that Bitcoin will hit $85,000 by the end of May, up 5 percentage points from earlier in the week. The combination of regulatory clarity and hopes for de-escalation in the Middle East has provided a powerful tailwind.
However, some analysts warn that if U.S. inflation indicators and energy prices continue to rise, the market may begin to reassess the Federal Reserve's ability to ease monetary policy. A shift in expectations for the Fed's liquidity cycle could reintroduce volatility and increase liquidation risks in the crypto market.
The ongoing CLARITY bill momentum and the Trump-Xi summit narrative are likely to keep Bitcoin in focus for the near term. Traders are watching the $82,000 level closely; a clean break above it could open the door to retesting the $85,000 region. Conversely, a failure to hold above $80,000 might invite renewed selling pressure.