Bitcoin traded near $80,000 after climbing almost 24% from below $64,000 in a week, its strongest weekly advance since March 2023. Forced short covering and U.S. spot ETF inflows drove the move, but analysts say sustained spot demand — not liquidations — must take over for the price to hold above $80,000.
Bitcoin reached a three-month high near $79,550 on Aug. 24 after rising from below $64,000 on Aug. 19. Separately, bitcoin.com data showed the coin touching an August peak of $79,989 before profit-taking pulled it back toward $79,200.
A short squeeze powered the initial breakout
The rally's first leg came as Bitcoin cleared resistance near $65,000 and ran through liquidation clusters above $67,000, forcing exchanges to close undercollateralized shorts. That wiped out more than $3 billion in leveraged shorts across derivatives markets on Aug. 19 and Aug. 20, with short positions accounting for roughly $2.77 billion, or 92%, of the total. Bitcoin shorts made up about $1.37 billion of the wipeout and Ethereum shorts around $1.01 billion, split across Binance, Hyperliquid and Bybit.
Forced buying can lift prices fast, but each liquidation closes an existing position rather than creating new demand. Nansen senior research analyst Nicolai Søndergaard said continued spot-market strength, not another leverage-driven push, is what would confirm the move. Bitget Wallet analyst Lacie Zhang put it more bluntly. According to crypto.news: "The latest move looks real, but it is also very fast."
ETF inflows add a second leg of demand
U.S. spot Bitcoin ETFs pulled in about $1.9 billion over the week ending Aug. 21, including roughly $606 million on Aug. 20 alone, marking five straight days of inflows. Those flows gave the rally a source of demand beyond forced short covering as Bitcoin pushed through several resistance levels.
Zhang said a clean close above $80,000, followed by a successful defense of the level, could open a move toward $85,000–$90,000 in the following weeks, with $95,000–$100,000 possible if ETF inflows and liquidity conditions keep improving. Bitfinex analysts separately pointed to a weekly close above roughly $73,500 followed by a retest as confirmation of the recovery, with $86,500 as the next resistance area above that.
A weaker dollar narrative is feeding the bid
Analysts pointed to the U.S. Treasury's bond buyback plans and remarks from Treasury Secretary Scott Bessent hinting at even larger buybacks as a main driver of the flight into alternative assets such as gold and cryptocurrency. Economist Peter Schiff argued the plan would shorten the average maturity of the national debt and fuel further quantitative easing and inflation. Bitcoin's 24-hour gain lifted its market capitalization to $1.59 trillion and cut its year-to-date losses below 10% for the first time since mid-May.
Bitfinex analysts warned that a fall back below about $64,500 — the average cost basis for the most recent buyer cohort — would mark the rally as an overshoot built on forced buying rather than durable demand.
Sources: crypto.news, Bitcoin News
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