The outgoing week turned out to be one of the most volatile and significant for the crypto market in recent months. Bitcoin not only updated local highs but also demonstrated strength capable of reversing the bearish trend. In parallel, the Ethereum Foundation warned of upcoming technical difficulties, while U.S. regulators presented ambitious plans to legalize digital assets.
Bullish Breakout: From $70,000 to $79,500
The start of the week set the tone for the entire market. As early as August 17, the leading cryptocurrency outpaced stock indices in daily dynamics, immediately drawing analysts' attention. Glassnode noted this signal, while CryptoQuant experts recorded the first signs of spot demand recovery, pointing to a possible end of the bearish phase.
The climax came on August 20, when bitcoin surged nearly 8% in a day, approaching the $70,000 mark for the first time in 11 weeks. This move triggered a cascade of liquidations: within the first 24 hours, positions worth a record $3 billion were forcibly closed, of which $2.7 billion were shorts. The following day, pressure continued but with less amplitude—$1.25 billion and $1 billion, respectively.
The wave of buying proved so powerful that by midweek the asset surpassed the $79,000 level, reaching $79,500 on Binance—levels last seen in mid-May. Analysts attribute this surge to a classic short squeeze, triggered by a U.S. Treasury statement about plans to double the volume of Treasury buyback operations under its liquidity support program.
By the end of the week, bitcoin had gained more than 22.5%, settling in a "sideways range" above $77,000. Altcoins showed even more impressive dynamics: Ethereum rose 29.3%, XRP—~50%, while HYPE and Dogecoin gained 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.
The Fear and Greed Index made a sharp jump from 34 to 71 points before correcting to 66. The total market capitalization grew from $2.17 trillion to $2.62 trillion, with bitcoin's dominance strengthening to 59.2%.
Ethereum Foundation: Warning of Disruptions and a New Gas Standard
Against the backdrop of the overall bullish sentiment, the Ethereum Foundation (EF) team issued an important warning on August 17. The upcoming Glamsterdam upgrade, which will change the network's gas model, could take a significant portion of software offline. According to developers, wallets, indexers, and fee estimation tools will be hit, especially those using a "hardcoded maximum gas limit."
The issue is related to EIP-8037, which introduces a separate state-gas dimension for operations that create new state. A simple 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. Developers are strongly advised to test their systems on the public Plataberget testnet and review smart contracts relying on the old fee calculation logic.
Regulatory Shift: GENIUS Act and New SEC Rules
This week made it clear that U.S. authorities are seriously committed to creating a clear legal framework for the crypto industry. The U.S. Treasury presented a draft of rules for implementing the GENIUS Act—the first federal law on payment stablecoins. The document defines strict requirements for issuers: one-to-one reserves, a limited list of permissible assets (dollars, bank deposits, short-term Treasury bonds), and mandatory independent audits.
Following this, the SEC published its own draft of Regulation Crypto Assets, which simplifies capital raising through tokens. Two exemptions from standard registration requirements are proposed: up to $5 million over four years and up to $75 million over a 12-month period. Additionally, the Commission proposed a "safe harbor" for investment contracts, which could remove some assets from the scope of securities laws. SEC Chairman Paul Atkins emphasized that these rules will not replace congressional legislation but will create a more robust foundation.
Solana Accelerates: Slot Reduced to 350 ms
Technical improvements have not bypassed Ethereum's competitors either. The Solana team activated the first stage of reducing the average slot time from 400 to 350 ms on the mainnet as part of proposal SIMD-0525. This is the first change to slot length since the network's launch. Plans include a sequential reduction to 300, 250, and 200 ms, which should significantly speed up transaction confirmation. Each stage is activated alternately in separate epochs, and the provided schedule allows stopping the upgrade if the share of missed blocks increases.
My Analysis and Outlook
The past week is not just another market surge but a signal of a paradigm shift. The combination of a powerful short squeeze, record ETF inflows, and, most importantly, active regulatory actions suggests that institutional interest in crypto assets is moving into a practical phase. However, one should not forget the risks: the EF's warning about wallet disruptions is a reminder that the network's technical complexity remains its Achilles' heel. The market is becoming more mature but also more demanding of infrastructure.
In my view, if the new SEC rules and the GENIUS Act are implemented as proposed, we will witness an influx of capital that previously feared entering U.S. jurisdiction. This could become a long-term bullish factor capable of driving bitcoin to new all-time highs in the coming quarters. But investors should remain cautious: volatility is not going anywhere, and technical upgrades may bring surprises.