Bitcoin climbed almost 24% in a week, moving from below $64,000 on Aug. 19 to a three-month high near $79,550 on Aug. 24, as U.S. spot ETF inflows and aggressive short covering powered the strongest weekly advance since March 2023. U.S. spot Bitcoin ETFs gathered roughly $1.9 billion over five consecutive sessions, including about $606 million on Aug. 20 alone.
The move also triggered a large derivatives reset. More than $3 billion in leveraged shorts were closed across crypto derivatives markets on Aug. 19 and Aug. 20, with shorts making up about 92% of the total. Bitcoin shorts accounted for roughly $1.37 billion and Ethereum shorts around $1.01 billion. Binance processed about $518 million in liquidations, Hyperliquid about $513 million, and Bybit close to $303 million.
Nansen senior research analyst Nicolai Søndergaard said Bitcoin has likely established an important local bottom, but he wants more evidence from U.S. spot markets before calling a confirmed cycle turn. He said selling pressure has eased, some whales have resumed selective accumulation, and ETF flows have improved, yet U.S. spot demand remains weak and derivatives positioning has recovered faster than cash-market confirmation. "I view Bitcoin’s latest rally as a meaningful improvement in market structure, but not yet as confirmation that the cycle has definitively turned," Søndergaard said.
Bitget Wallet research analyst Lacie Zhang attributed the rally partly to traders closing bearish leveraged positions and said the market’s next test will come once forced covering loses momentum. She expects a clean close above $80,000 and a successful defense of that level to open a move toward $85,000–$90,000, with an accelerated run toward $95,000–$100,000 possible if ETF inflows stay strong. However, Zhang also described the market as stretched after a weekly gain of about 20% and warned that rising funding rates, weaker ETF flows, or a failure to hold $80,000 could trigger a reset.
Bitfinex analysts similarly said the breakout was supported by spot buying and short covering rather than mainly new leveraged longs. During the first part of the rally, Bitcoin gained about 10%–11% while aggregate open interest increased by only about 4%. Søndergaard added that if $80,000 rejects again while open interest and funding continue to rise, the advance would look increasingly squeeze-led and could leave room for another correction.
Separately, Bitget CEO Gracy Chen cast doubt on the sustainability of the rebound and said she plans to add to her personal Bitcoin holdings if the asset drops to around $50,000 in the second half of 2026 or early 2027. Chen said most of her portfolio is allocated to Bitcoin and the S&P 500, while Ethereum and Solana represent less than 1%. She was favorable on Hyperliquid and critical of memecoins, arguing that too many investors have lost money in speculative tokens.
Zhang expects Ethereum and Solana to receive the first rotation of capital if Bitcoin’s advance extends beyond the largest crypto asset. Upcoming macro events could influence spot demand: July PCE inflation and revised second-quarter GDP figures are due Aug. 26, followed by Federal Reserve Chair Kevin Warsh’s Jackson Hole address on Aug. 28. June core PCE inflation was 3.3%, above the Federal Reserve’s 2% target, while the advance estimate showed annualized U.S. economic growth slowing to 1.5% in the second quarter.
