The outgoing week was one of the most volatile and significant for the digital asset market in recent months. Bitcoin not only updated local highs but also triggered a record wave of liquidations, while regulators and key industry players continued to shape a new reality for cryptocurrencies.
Bullish breakout and the short squeeze of the century
The start of the week set the tone for the entire market. As early as August 17, the first cryptocurrency demonstrated momentum outpacing traditional stock indices, and analysts recorded the first signs of recovering spot demand. This was a harbinger of the powerful move that unfolded on August 20.
Within 24 hours, bitcoin jumped nearly 8%, approaching the $70,000 mark for the first time in 11 weeks. However, this was merely a prelude. The momentum of growth proved so strong that just a few days later, the price broke through the psychological barrier of $79,000, reaching $79,500 on Binance — a level last seen in mid-May.
The driver of this rally was a classic short squeeze. The volume of forcibly closed short positions in the first 24 hours of the move approached $3 billion, of which $2.7 billion came from shorts alone. The trigger for this impulse was a statement by the U.S. Treasury about plans to at least double the volume of Treasury buyback operations under the liquidity support program.
Altcoins demonstrated even more impressive dynamics. Ethereum, despite a correction below $2,500, gained 29.3%, XRP rose by 50%, while HYPE and Dogecoin showed gains of 41.3% and 32%, respectively. Spot bitcoin ETFs recorded their largest weekly inflow since October 2025 — $1.92 billion, while Ethereum funds attracted a record $697 million.
Ethereum Foundation warning and regulatory shift
Amid market euphoria, the Ethereum Foundation team addressed developers with an important warning. The upcoming Glamsterdam upgrade, which will change the network's gas model, could lead to disruptions in many crypto wallets, indexers, and fee estimation tools. The issue is related to EIP-8037, which adds a separate state-gas dimension for operations that create new state. Developers are strongly advised to test their systems on the public Plataberget testnet.
The regulatory environment is also undergoing significant changes. The U.S. Treasury presented a draft rule for implementing the GENIUS Act — the first federal law on payment stablecoins. The document establishes strict reserve requirements at a 1:1 ratio and limits the list of permissible assets to highly liquid instruments. In parallel, the SEC proposed new Regulation Crypto Assets rules, simplifying capital raising through tokens and providing a "safe harbor" for certain digital assets.
Technological development continues: Solana activated the first phase of reducing slot time from 400 to 350 ms, which should accelerate transaction confirmation on the network.
My view: The current rally demonstrates the market's maturity but also reminds us of its cyclical nature. Record liquidations and ETF inflows point to the return of institutional interest, yet the Ethereum Foundation's warning about technical risks is an important reminder that fundamental infrastructure still needs refinement. Regulatory initiatives, as always, bring both opportunities and new challenges for market participants.