Over the past few days, the leading cryptocurrency has demonstrated an impressive surge, breaking above the $80,000 mark after several months of consolidation. In a short period of time, the asset has risen by more than 13%, triggering the liquidation of short positions worth approximately $3 billion. However, behind this move are not just market sentiments, but specific actions by the U.S. Department of the Treasury that deserve close attention.
The key catalyst was the department's decision to increase the buyback of long-term Treasury bonds. This involves using funds from the Treasury General Account (TGA), which currently holds about $950 billion. This step was taken amid a rise in 10-year yields to 4.7% and 30-year yields above 5.2%, which places excessive pressure on the entire financial system, making mortgages, loans, and corporate financing more expensive.
Mechanics of the market impact
The mechanism is simple: by increasing the buyback from $2 billion to at least $4 billion per operation, the Treasury artificially boosts demand for bonds, pushing their prices up and yields down. After the announcement, the 10-year yield adjusted from ~4.74% to ~4.71%, and the 30-year from ~5.28% to ~5.24%. At first glance, these are minor changes, but in a $32 trillion market, even such fluctuations noticeably alter the cost of money in the economy.
If the Treasury continues to more actively deploy TGA funds, liquidity will begin to flow back from the Fed to bondholders—banks, funds, and investors. In terms of its impact, this will resemble a quantitative easing (QE) program, although the implementation mechanism differs. However, these funds will reach the crypto market last—mainly through exchange-traded funds. It was precisely this news that Bitcoin reacted to with growth: the dollar and bond yields were declining, and investors began ramping up risk again. From August 17 to 21, spot Bitcoin ETFs in the U.S. recorded net inflows of about $1.9 billion, with all five trading days being positive.
Key levels for Bitcoin and Ethereum
Bitcoin currently holds about 59% of the market capitalization, setting the direction for all altcoins. After recovering above $70,000, the asset has returned to the zone of the average purchase price of short-term investors (those holding the coin for less than 155 days), who are now up 11%. Long-term holders have gained only 1.5%, while the newest buyers are up 12.7%.
The main support range is $73,000-75,000, where many new investors opened positions. As long as the price holds above this, there is no reason for panic selling. However, a break below $73,000 would create dangerous pressure, and a test of $70,000 would be a critical scenario. The working range for the week is $75,000-81,000. The zone around $80,000 is a historical "price imbalance zone": little volume has accumulated here, and the market often returns to fill this gap. Additional momentum could come from short liquidations in the $80,000-81,000 area. The local high of the move is $83,000-85,000. A sharp jump to $100,000 (+27% from current levels) is unlikely without a new influx of liquidity or a powerful catalyst.
For Ethereum, the logic is similar: the coin has risen 29% over the week, trading around $2,500, with a monthly gain of about 34%. Resistance is at $2,600-2,700, but after such a strong weekly rally, opening a long here is risky. More interesting is the $2,200 zone—a pullback of roughly 12% from the current price. There, I would consider a local long with targets of $2,600 (+18%) and $2,700 (+23%), provided Bitcoin maintains its upward structure. In the $2,600-2,800 area—a zone for a short with a return to $2,200 (-15% from $2,600, -21% from $2,800). Spot Ethereum ETFs received about $697 million in net inflows over the week, but the sustainability of this flow remains in question.
This week, the market will be watching the PCE index (the Fed's primary inflation indicator) and Nvidia's earnings report, where revenue of about $92 billion is expected. Additionally, Fed Chair Kevin Warsh's speech on Friday could set the tone for the coming weeks.
My view: The rally looks fundamentally justified, but its sustainability will depend on whether the Treasury continues to increase bond buybacks. As long as these are one-off measures rather than systemic policy, the market could face a correction in the $75,000-77,000 zone. Without a new influx of liquidity, a breakout above $85,000 is unlikely.