Bitcoin blew past $79,000 this week, capping a rally that saw the asset gain roughly 20% to 30% in just a few days. The move, which peaked near $79,500 around August 21-22, marks a dramatic reversal from earlier this month when prices were stuck in the low-to-mid $60,000s.
The short squeeze heard round the market
The primary engine behind this surge was a historic short squeeze. Estimated liquidations exceeded $2.7B as traders who had bet against Bitcoin were forced to cover their positions at increasingly painful prices. Each wave of forced buying pushed prices higher, which triggered more liquidations, which pushed prices higher still.
Bitcoin ETF inflows picked up meaningfully during the rally, adding a layer of organic demand on top of the mechanical buying pressure from liquidations. Broader optimism around potential regulatory developments also gave traders a reason to lean bullish rather than fade the move.
Treasury policy as a tailwind
