On August 25, the leading cryptocurrency broke through the psychologically important $80,000 mark for the first time since mid-May, reaching $81,000 at its peak. This move resulted from a combination of two powerful factors: a record short squeeze that acted as a catalyst, and sustained capital inflows into US spot bitcoin ETFs. Over six trading sessions, the funds accumulated approximately $2.26 billion, signaling the return of institutional demand.
At the time of writing this analysis, BTC is trading near $80,000, showing a weekly gain of more than 25%. Notably, on August 20, around $3 billion in positions were liquidated on the market, of which $2.7 billion were shorts. The very next day, forced closure of short positions added another $1.2 billion. However, as I noted earlier, such impulses tend to exhaust themselves—and that is precisely why the key question remained whether there was organic demand.
New data partially alleviates these concerns. Over the past week, spot bitcoin ETFs attracted $1.92 billion, and on August 24, the funds received an additional $337.56 million in net inflows. This marks the sixth consecutive positive session. Leaders were IBIT from BlackRock with $208.93 million and FBTC from Fidelity with $104.57 million. An additional signal was that the bitcoin premium index on Coinbase briefly turned positive on August 24 for the first time in 98 days, reaching 0.0032%, although it returned to -0.0141% the very next day.
Macroeconomic backdrop and opinions
An important driver was the US Treasury's decision to expand its buyback program for long-term Treasury bonds. The limit for buyback operations of securities with maturities of 10–30 years will be increased from $2 billion to at least $4 billion per operation. The new parameters will take effect on September 9 and last until November 4. Former BitMEX CEO Arthur Hayes sees this as the beginning of a new bull market, arguing that market pressure will force the Treasury to increase support, which will ultimately boost dollar liquidity.
However, not everyone shares this optimism. Stanley Druckenmiller, billionaire and former hedge fund manager, called the expansion of the buyback program a mistake, warning of risks to confidence in the US government debt market. He emphasizes that high yields reflect fundamental problems: the budget deficit and federal debt exceeding $40 trillion. The bond market has not yet confirmed a sustainable reaction: the 10-year Treasury yield has returned to 4.7%, and the 30-year to 5.22%, although the latter had previously reached a 19-year high of 5.335%.
The market approaches an overheated zone
The rally has also affected altcoins: over the week, Ethereum rose by 31.02%, XRP by 49.79%, and Solana by 31.98%. However, signs of overheating are emerging. Bitcoin's Relative Strength Index (RSI) has risen to approximately 78, indicating overbought conditions. The options market is also sending mixed signals: on August 24, traders spent $2.9 million on 2,000 call options with a strike price of $82,000 expiring on September 4.
My comment: Current dynamics demonstrate that institutional demand can support the market even after the short squeeze effect has been exhausted. However, the overheated zone and mixed macroeconomic signals point to the likelihood of a correction. The key support level remains $75,000, and if ETF inflows persist, bitcoin could consolidate above $80,000. But in the medium term, the market will need consolidation for healthy continued growth.