Bitcoin Nears $80,000 as Short Liquidations, $1 Billion in ETF Inflows Fuel More Upside Bets

• Expectations for further gains are building as <a href="https://xpertsstudio.com/eu-carbon-taxes-push-bitcoin-mining-to-russia-study-claims/” title=”EU Carbon Taxes Push Bitcoin Mining to Russia, Study Claims”>Bitcoin approaches $80,000, while the market has seen the largest short liquidation since 2021 and more than $1 billion of net inflows into US spot Bitcoin ETFs.
• Investor sentiment is being supported by the CLARITY Act, an easing regulatory risk premium, and the potential entry of institutional investors, helping draw fresh buying interest into the crypto market.
• Caution remains warranted because Bitcoin is still about 43% below its all-time high, the RSI has entered overbought territory, and the key question is whether actual buying demand will continue after the effect of short liquidations fades.

Forecast Trend Report by Period

Bitcoin is nearing $80,000, fueling expectations that the rally in digital assets may have further to run.

Bloomberg reported on Aug. 23 that Bitcoin approached $80,000 after posting its strongest weekly gain in years over the past seven days. The token has staged a steep rebound in a short span after months of declines, rapidly shifting market sentiment.

A shift in the US bond market was a key catalyst for the move. Treasury Secretary Scott Bessent said he plans to at least double long-term Treasury buybacks. Long-dated Treasury yields briefly fell and the dollar weakened, while gold climbed, putting the so-called debasement trade back in focus.

The debasement trade refers to buying supply-constrained assets such as gold or Bitcoin as a hedge against the erosion of fiat-currency value as government debt and fiscal burdens increase. Bridgewater founder Ray Dalio has also recently pointed to Bitcoin while warning about unsustainable debt growth.

“It is very welcome to see life returning to crypto markets,” Noel Acheson, author of the Crypto Is Macro Now newsletter, said. “This rally feels different from the unstable rebounds seen over the past few months.”

The market is now watching whether the latest advance proves to be a one-off rebound or attracts fresh buying and extends higher. In past bull markets, Bitcoin rallies first triggered short liquidations. New money then flowed into spot exchange-traded funds and crypto-related stocks, lifting prices again.

That pattern began to emerge last week. Bitcoin short liquidations reached their largest scale since 2021. Spot trading volume also increased, while US spot Bitcoin ETFs drew more than $1 billion of net inflows over the week. The prospect of further gains is getting a boost as the market sees not only forced short covering but also fresh investment capital.

The US regulatory backdrop also supported sentiment. President Donald Trump recently renewed his call for Congress to pass the CLARITY Act, a digital-asset market structure bill.

Trump’s renewed push for crypto market structure legislation is lowering the regulatory risk premium, Rachael Zhang, a research analyst at Bitget Wallet, said. Clear rules are important because they make it easier for institutional investors to assess the risks of crypto investments and enter the market.

Technical indicators also pointed to strength. Bitcoin has climbed above both its 100-day and 200-day moving averages, two of the market’s main trend gauges. Its 14-day relative strength index, however, has entered territory typically viewed as overbought.

Standard Chartered sees room for further gains. Geoffrey Kendrick, the bank’s global head of digital assets research, said record short liquidations and weekly net inflows of more than $1 billion into spot ETFs could attract additional capital as prices rise and eventually bring leveraged investors back into the market.

“For the first time this year, there is a risk that our year-end target of $100,000 is too low,” Kendrick said. “Investors are again recognizing how quickly prices can rise, and after Oct. 6 there is a possibility Bitcoin overshoots toward its all-time high of $126,000 before year-end.”

Still, some analysts caution that it is too early to conclude this surge marks the start of a full-fledged uptrend. Bitcoin has recovered to levels last seen in May, but it remains about 43% below the all-time high reached in October last year. The early stage of the rally was also driven by large-scale short liquidations.

Whether the rebound endures may ultimately depend on whether genuine buying demand continues after the effect of short covering fades. Bitcoin has repeatedly surrendered gains after rebounds this year when fresh buying failed to materialize.

“Encouraging signs are emerging,” Tanay Ved, chief analyst at Talos, said. “As prices kept rising, we saw not just short-position unwinds but also new buying flows coming into the market.”

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Source: en.bloomingbit.io