In less than two weeks, the leading cryptocurrency has demonstrated an impressive surge, rising by approximately 29% — from $63,000 to $81,000. On August 25, a three-month high was updated, prompting the market to talk about a trend reversal. At the center of attention is not just speculative hype, but a convergence of macroeconomic, institutional, and technical factors that together have formed a powerful upward momentum.
Key Drivers: From Fed Policy to Institutional Flows
The main catalyst was the U.S. Treasury Department's announcement of an expansion of its long-term bond buyback program. Monthly volumes will increase to $4 billion for operations with securities maturing in 10 to 30 years. This decision was made against the backdrop of 30-year Treasury yields rising to 5.34% — the highest level since 2007. Although the $14 billion in additional liquidity per quarter may seem modest compared to the $32.2 trillion total national debt, the market interpreted this move as a signal of the authorities' readiness to contain long-term rates.
This revived the so-called "debasement trade" — a strategy based on expectations of fiat currency devaluation. Investors are actively buying up "hard" assets: gold, silver, and bitcoin, while simultaneously shedding traditional "safe" instruments like government bonds. The weakening dollar and the simultaneous rise of gold to a three-month high only confirmed this shift.
An additional boost came from a reversal in institutional flows. For the week from August 17 to 24, net inflows into spot bitcoin ETFs totaled approximately $2 billion, reaching a three-month high. This is particularly telling against the backdrop of $4 billion in outflows the previous week. Such a rapid shift in sentiment suggests that major asset managers quickly responded to macroeconomic signals, incorporating scenarios of further policy easing and dollar weakness into their models.
The Role of Liquidations and Technical Levels
The "snowball effect" of liquidations should not be discounted. Over the week, approximately $7 billion in short positions were closed across all crypto assets. Forced closure of shorts means buying, which further pushed the price upward. However, it is precisely this dynamic that harbors the main risk: in the event of negative news, it can work in the opposite direction.
From a technical standpoint, bitcoin has not yet overcome the key resistance level. To confirm a trend reversal, it is necessary to consolidate above the $80,000–$83,000 range. The most likely scenario for the coming days appears to be stabilization within the $70,000–$80,000 corridor. Such a pause would allow the market to "digest" the sharp move and accumulate strength before the next impulse.
My view: The market has received a powerful macroeconomic signal, but one should not forget the fragility of the current growth. Low liquidity above $80,000 makes the asset vulnerable to sharp fluctuations, and any hint of a hawkish shift in Fed rhetoric could trigger a correction. Investors should closely monitor price action and macroeconomic data, especially Treasury interventions and signals from the Fed.