Bitcoin climbed above $80,000 on Aug. 25 for the first time in over three months, extending a seven-day rally of more than 22%. A wave of short-position liquidations and rising spot ETF inflows are driving the move, while investors now look to a Federal Reserve speech and pending Senate legislation for the next signal.
Bitcoin pushed above $80,000 on the morning of Aug. 25, its first move past that level in over three months. The rebound caps a stretch in which bitcoin has gained over 22% in the past seven days.
Short sellers caught out
The rally has been spurred by several factors, including fears of a weaker dollar and increased institutional demand. As prices climbed, the speed of the move surprised some short-sellers, and over $7 billion in short crypto positions were liquidated in the past week as a short squeeze forced traders to buy back positions into the rise.
ETF inflows fuel the rebound
The shift in sentiment shows up in the Bitcoin ETF market too, where spot funds have taken in over $2.2 billion since Aug. 17. The iShares Bitcoin Trust ETF gained $209 million in a single day, and the Fidelity Wise Origin Bitcoin Fund added $105 million over the same session. Money also moved into Ethereum funds: the iShares Ethereum Trust ETF grew its assets under management by almost $91 million in the same period.
What comes next
Whether the rally holds depends on several factors, including Federal Reserve Chairman Kevin Warsh's speech at the Jackson Hole conference on Friday. Pressure is also building on the Senate to pass key crypto legislation in September.
Source: Motley Fool
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