The outgoing week proved truly historic for the digital assets market. The leading cryptocurrency not only updated local highs but also triggered a record wave of liquidations, while regulators on both sides of the Atlantic introduced ambitious legislative initiatives. I break down the key events that shaped the market's trajectory.
Bullish breakout: bitcoin and altcoins in a rally
The market came alive after a prolonged consolidation. Bitcoin, which had shown cautious optimism early in the week, made a powerful surge. By August 17, the leading cryptocurrency outpaced the stock market in momentum, as noted by Glassnode analysts. CryptoQuant, in turn, flagged signs of recovering spot demand, which could signal the end of the bearish phase.
The culmination came on August 20, when BTC quotes jumped nearly 8% in a day, approaching the $70,000 mark for the first time in 11 weeks. This move only gained momentum: digital gold continued its assault and broke through the $79,000 level, reaching $79,500 on Binance — the last time such values were recorded was in mid-May.
Of course, such a vertical move could not avoid a cascade of liquidations. In the first 24 hours, the volume of forcibly closed positions approached $3 billion, of which $2.7 billion came from shorts. The next day, the figures were $1.25 billion and $1 billion, respectively. Clearly, we witnessed a classic short squeeze, triggered by the U.S. Treasury's statement about plans to at least double the volume of Treasury buyback operations under its liquidity support program.
After such rapid growth, bitcoin entered a consolidation phase, holding above $77,000. Over the week, the asset gained more than 22.5%. Altcoins showed even more impressive dynamics: Ethereum added 29.3%, XRP — about 50%, while HYPE and Dogecoin rose by 41.3% and 32%, respectively.
Institutional interest also reached new heights. Spot bitcoin ETFs recorded their largest weekly inflow since October 2025, at $1.92 billion. Ethereum-based exchange-traded funds attracted $697 million, also a record since autumn. The fear and greed index jumped from 34 to 71 points before correcting to 66, reflecting a sharp shift in market participants' sentiment.
Ethereum Foundation warns of Glamsterdam risks
Amid widespread optimism, the Ethereum Foundation (EF) team issued an important warning. The upcoming Glamsterdam upgrade, which will change the gas model, could cause disruptions in the operation of several crypto wallets, indexers, and fee estimation tools. Developers recommend testing systems on the public Plataberget testnet.
The EF paid special attention to tools with a "hard-coded maximum gas limit" — such solutions will stop working and require updates. The issue is related to EIP-8037, which adds a separate state-gas dimension for operations that create new state. A regular ETH transfer to an existing address will retain a cost of 21,000 units, but sending to a new address will incur an additional charge. This is a critical point for smart contract developers who rely on the old fee calculation logic.
Regulatory shift: GENIUS Act and new SEC rules
The regulatory environment in the U.S. is undergoing significant changes. The Treasury Department presented a draft of rules for implementing the GENIUS Act — the first federal law on payment stablecoins. The document defines strict requirements for issuers, including one-to-one reserve backing and limiting the list of permissible assets to highly liquid instruments such as dollars and short-term Treasury bonds.
In parallel, the SEC proposed new rules for the crypto market called Regulation Crypto Assets. The initiative simplifies capital raising through tokens, providing two exemptions from standard registration requirements: up to $5 million over four years and up to $75 million per 12-month period. A "safe harbor" for certain investment contracts was also proposed. SEC Chair Paul Atkins emphasized that these rules will not replace legislation passed by Congress but will create a more sustainable foundation for the market.
Solana speeds up
Technical improvements have not bypassed other networks either. Solana activated the first stage of reducing the average slot time from 400 to 350 ms on the mainnet as part of implementing proposal SIMD-0525. This is the first reduction in slot length since the network's launch. Validators on the Agave v4.2 client have already activated the change, which should speed up transaction confirmation. Plans include further reductions to 300, 250, and 200 ms, with each stage having its own activation mechanism and being able to be halted if the share of missed blocks increases.
My comment: This week's market dynamics confirm that liquidity is returning to the crypto sector with renewed force. However, such rapid growth often precedes a correction, so investors should remain cautious. Regulatory initiatives, especially in the U.S., are a long-term positive that could attract institutional capital, but their implementation will take time. Keep a close eye on the $80,000 level for bitcoin: a breakout could open the path to new all-time highs, but failure will be a signal to take profits.