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Bitcoin rose past $72,000 on Aug. 20 and broke above $73,000, jumping about 15% since Aug. 16. The rise liquidated more than $3 billion of crypto short positions, and marked the biggest Bitcoin short liquidations since at least 2021, blockchain outlet Decrypt reported.
Markets point to U.S. Treasury purchases of long-term government bonds, comments about possible Bitcoin buying by U.S. President Donald Trump, and a large short squeeze as drivers of the spike. Investors were also buoyed by $517 million of inflows into U.S. spot Bitcoin ETFs on Aug. 19, the biggest daily net inflow since May.
Analysts say the rally needs fresh spot buying beyond short liquidations to keep going. Julio Moreno (훌리오 모레노), head of research at CryptoQuant, said that if spot demand continues to rise, gains could persist after the initial shock from macro factors. He added that because it is still officially a bear market, a price correction after the surge is also possible.
Moreno cited Bitcoin’s 365-day moving average near $83,000, as well as CryptoQuant’s profit-and-loss index and bull score, as key indicators. He said a shift into a bull market would require the profit-and-loss index to break above the 365-day moving average, but there has been no such signal yet. The bull score also remains in bearish territory, he said.
Some see technical momentum improving. Nicolai Sondergaard (니콜라이 손데르고르), a senior research analyst at Nansen, said Bitcoin has improved on the charts after reclaiming its 200-day simple moving average around $69,000. He said the breakout would be valid if it holds above the 200-day line, but dropping back below it could signal a failed attempt to rise. On the upside, the recent high of $72,824 is being cited as an immediate resistance level.
Sondergaard warned that much of the rally was driven by liquidations rather than sustained buying. He said the biggest risk is that the move is a short-squeeze spike rather than a rise based on new buying. After forced liquidations end, thin buying could be left and prices could quickly reverse, he said.
Adam McCarthy (애덤 매카시), an analyst at Lotech, noted that more than half of the Aug. 19 gains came within an hour. He said an expansion of U.S. Treasury buybacks helped spur a market reappraisal, but the next leg higher needs to be filled by actual buying rather than short liquidations. He also pointed to whether 30-year U.S. Treasury yields rise again toward 5.3 percent, and whether crypto funding rates show a genuine long premium.
Others are more optimistic. Ishmael Asad (이슈마엘 아사드), a research analyst at Bitwise, called the spike the strongest signal that Bitcoin has passed a bottom. He cited an expansion in U.S. Treasury buybacks, a proposed regulatory framework by the U.S. Securities and Exchange Commission, and this week’s White House crypto summit as catalysts. He added that it would be difficult for the rally to continue at the current pace, and said the coming months are likely to see sideways trading or a gradual rise as markets wait for further developments. A possible U.S. Senate vote in September on the Clarity bill was cited as the next date investors are watching.
James Butterfill (제임스 버터필), head of research at CoinShares, also said the environment could remain supportive, but he put more weight on the likelihood that Bitcoin will trade in a range rather than move straight into a trend breakout. He said the recent rally was driven more by shifts in the macro environment than by crypto-specific issues. Recent inflation and jobs data have weakened expectations of further tightening by the Federal Reserve, and large holders have stopped selling and are accumulating again, but the scale is not yet enough to support a sustained breakout, he said.
Against that backdrop, the next key price level is seen at $80,000. Butterfill said the $80,000 zone is an important upper boundary and a clear break above it would require more definite confirmation that Federal Reserve policy risks are moving away from additional tightening. Ultimately, he said, whether the rebound lasts depends on whether ETF inflows continue, whether accumulation by large investors expands, and whether U.S. Treasury yields and the monetary policy backdrop do not become a burden again.
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