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Bitcoin surged more than 23% over three days, adding roughly $275 billion in market capitalization and touching $79,000 for the first time in nearly three months. On-chain data from CryptoQuant shows approximately 17,800 BTC flowed into Binance entirely from short-term holders — including investors who bought less than 24 hours prior — marking the largest such inflow since February. Long-term holders sent no coins to the exchange, indicating the selling is purely speculative. The rally was driven by short liquidations totaling nearly $3 billion, the U.S. Treasury’s bond buyback decision, and President Trump’s pro-crypto remarks at a White House summit. Spot Bitcoin ETFs recorded over $600 million in net inflows. However, CryptoQuant analyst Axel Adler Jr. cautioned that the Coinbase Premium Index remains negative and BTC-denominated open interest declined, suggesting U.S. spot demand has not yet confirmed the rally’s strength.
Key Elements
Bitcoin’s blistering three-day rally of more than 23% has triggered the largest wave of short-term holder inflows to Binance since February, as traders who bought the cryptocurrency less than 24 hours earlier rushed to lock in profits, according to on-chain data from CryptoQuant.
The cryptocurrency closed around $78,300 on Thursday, posting a single-day gain of more than 7% and adding roughly $275 billion in market capitalization over the three-day stretch The surge pushed Bitcoin to levels not seen in nearly three months, with the token touching $79,000 at one point during the week
Approximately 53,000 BTC moved to exchanges during the rally, of which 17,800 BTC flowed into Binance. What stands out is the composition of those inflows: every single Bitcoin sent to Binance came from short-term holders, and among them, investors who had purchased their coins less than a day prior accounted for the entire 17,800 BTC figure.
Long-term holders — those who have held Bitcoin for six months or more — sent no coins to Binance during the same period, suggesting the selling pressure is purely speculative rather than structural. Darkfost characterized the activity as “pure short-term speculative movement” rather than a fundamental shift in market positioning. “These short, impulsive moves are amplifying the volatility that has been building again in the crypto market recently,” the analyst added.
The scale of short-term holder inflows to Binance is the largest since February, underscoring how quickly profit-taking can emerge after a sharp price spike.
Rally Drivers: Liquidations, Treasury Moves, and Political Tailwinds
The explosive move higher was fueled by a confluence of factors. Nearly $3 billion in short positions were liquidated over a 24-hour period as Bitcoin surged past $71,000, according to data cited by cryptocurrency advocate and podcast host Scott Melker. Those forced buy-backs acted as “gasoline” that accelerated the rally.
Melker, speaking on his Thursday livestream, offered a three-part explanation for the breakout. The initial catalyst came from the U.S. Treasury’s decision to buy back long-dated bonds. That was followed by the liquidation of excessive leverage, while President Donald Trump’s pro-crypto remarks at a White House summit on Wednesday added another tailwind.
Spot Bitcoin exchange-traded funds provided additional support, recording $517.19 million in net inflows on August 19 — the strongest showing in nearly three and a half months — and spiking further to $606.3 million by August 20.
Mixed Signals Beneath the Surface
Despite the impressive price action, some analysts are urging caution. Axel Adler Jr., a market commentator at CryptoQuant, pointed out that two key indicators have yet to confirm the rally’s durability.
The Coinbase Premium Index, which compares Bitcoin prices on Coinbase with those on Binance, remained negative throughout the advance. While the index improved from -0.11 to -0.046 — indicating stronger U.S. demand — it never crossed into positive territory. This suggests American spot investors participated in the recovery but were not its primary driver. A move above zero would provide stronger confirmation of sustained U.S. buying pressure.
Secondly, dollar-denominated open interest increased 11.7% to $25 billion as Bitcoin rallied. However, measured in BTC terms, open interest actually declined 8.7%, falling from 366,000 BTC to 334,000 BTC. The divergence indicates traders were closing existing positions rather than aggressively adding fresh leverage.
“Price is rising faster than new positions are being built,” Adler noted, adding that while this dynamic is constructive for market structure in the short term, it raises questions about the rally’s sustainability.
Broader Market Reaction
The crypto rally extended beyond Bitcoin. Ethereum topped $2,360, while XRP and Dogecoin also posted strong gains. The global cryptocurrency market capitalization stood at $2.49 trillion, surging 5.42% over 24 hours. Trading volume jumped 18%.
Sentiment shifted firmly into “greed” territory, according to the Crypto Fear & Greed Index. On Binance, retail derivatives traders held a net short position in BTC, while whales sharply cut their long exposure — a positioning dynamic that often precedes sharp moves in either direction.
Meanwhile, traditional equities sold off sharply on Thursday. The Dow Jones Industrial Average declined 703.84 points, or 1.32%, to end at 52,759.21. The S&P 500 shed 0.87% to close at 7,641.16, while the Nasdaq Composite fell 1% to settle at 26,067.17. The 10-year Treasury yield rose more than 5 basis points to 4.706%, and the 30-year yield climbed to 5.251%, after both spiked earlier in the week to their highest levels in nearly 20 years.
Cryptocurrency-related stocks showed mixed performance. Strategy Inc. (MSTR) and Bitmine Immersion Technologies Inc. (BMNR) closed down 7.81% and 6.57%, respectively, despite the broader crypto rally.
The Road Ahead
Michaël van de Poppe, a widely followed cryptocurrency analyst and trader, identified $73,500 to $75,000 as Bitcoin’s “first real test” following the sharp breakout. He predicted a short-term stall, suggesting that “other assets within the ecosystem will start to have their massive breakouts” once Bitcoin consolidates.
CryptoQuant’s on-chain analysis highlighted that Bitcoin recorded its largest profit-side movement ever on Binance, occurring right at levels where trapped buyers “finally have a chance to exit.” The firm noted that a sustained reclaim of the short-term holder realized price, combined with the Spent Output Profit Ratio holding above 1 and improving spot demand, would indicate that buyers are absorbing breakeven supply. Conversely, a rejection would mean the rebound is turning trapped holders into “exit liquidity.”
The interplay between short-term speculative flows and longer-term structural demand will likely determine whether Bitcoin’s latest surge represents the beginning of a sustained uptrend or another volatile head-fake in a market still finding its footing.
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Source: finance.biggo.com