Bitcoin Price Hits $87,000 as Trump Proposes $5B to Rebuild Gulf Sites Hit by US-Iran War

Bitcoin price climbed above $87,000 on Monday as a broad crypto rally forced bearish leveraged positions out of the market. The recovery was buoyed by improved risk sentiment as Donald Trump’s administration proposed a $5 billion Gulf reconstruction to repair infrastructure damaged during the Iran war.

At press time, Bitcoin had gained about 7% over 24 hours and reached its highest level since January. Falling oil prices, lower Treasury yields, and renewed ETF demand also supported risk assets during the session.

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Trump Proposes $5 Billion Gulf Energy Reconstruction Fund

The rally came as the Trump administration proposed a $5 billion investment in a new Middle East energy fund. The Wall Street Journal said the plan would support infrastructure damaged during the seven-month Iran war.

The proposal would seek matching contributions from Saudi Arabia, the UAE, Qatar, Bahrain, Kuwait, Oman, Iraq and Jordan. It would also support routes designed to reduce reliance on the Strait of Hormuz.

The proposed fund would focus on damaged energy infrastructure and alternative oil and gas transport routes. Energy markets remain important for risk assets because oil prices can affect inflation expectations and Treasury yields. Monday’s Bitcoin rally also coincided with lower oil prices and softer bond yields.

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Bitcoin Short Squeeze Pushes BTC Above $87,000

The rally forced about $919 million in crypto short positions to close as Bitcoin moved through key resistance. Bitcoin shorts accounted for more than $557 million of that amount during Monday’s advance.

Short liquidations require bearish traders to close positions, which can add buying pressure during a rising market. Spot Bitcoin ETF inflows also supported the move, while several crypto-linked stocks advanced alongside BTC after Trump called plans for an attack.

Leverage remained elevated even after the liquidation wave, as traders continued adding exposure during the rally. That leaves derivatives positioning important as Bitcoin approaches another major psychological price level.

Glassnode said Bitcoin remained above its true market mean and short-term holder cost basis. Per the report, Bitcoin price holding those levels has historically been associated with stronger market regimes.

Bitcoin Analysis Turns to $90,000 and $100,000

Bitcoin’s breakout has shifted attention toward the $90,000 area. Crypto analyst Michaël van de Poppe identified $90,000 to $91,000 as the next zone to watch for the BTC price.

Van de Poppe said stronger momentum could extend the move toward $98,000 to $100,000. In line with his forecast, prediction-market traders have also raised their expectations, with Polymarket showing a 42% probability that BTC will reach $100,000 before the end of 2026.

The next phase now depends on whether spot demand continues after the short squeeze, since Bitcoin must also absorb fresh leverage as traders position around the $90,000 level.

Moreover, according to Santiment, the rally is becoming more crowded, with Bitcoin FOMO at its highest level since 2024. Open interest is up 7.6% to about $156 billion, suggesting fresh leverage is building and could amplify volatility near the $90,000 resistance zone.