[Bitcoin Now] Bitcoin Nears $80,000 Recovery... Is the Rally Set to Resume?

The price of Bitcoin is rapidly rising, on the verge of recovering the $80,000 mark. As U.S. long-term Treasury yields fall and the dollar weakens, buying interest in risk assets such as Bitcoin has increased. However, it is expected that for the rally to continue, new capital inflows—such as through Bitcoin exchange-traded funds (ETFs)—will be necessary, given that much of the recent surge has been driven by short position liquidations.

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According to CoinMarketCap, a virtual asset market tracking site, as of 9 a.m. on August 24, Bitcoin was trading at $77,726.87, up 0.84% from 24 hours earlier. Leading altcoins (cryptocurrencies other than Bitcoin) such as Ethereum, Tether, and Ripple (XRP) were also up by 1% to 3%.

On August 16, Bitcoin was moving in the $60,000 range, but then surged quickly, climbing to as high as $79,000 during intraday trading on August 21. This marked the highest level since May. While some gains were given up afterward, Bitcoin has managed to hold in the $77,000 range.

Changes in the bond market have been identified as the backdrop for this Bitcoin rally. U.S. Treasury Secretary Scott Bessent announced plans to at least double the scale of long-term Treasury buybacks, resulting in a drop in long-term Treasury yields and a weakening of the dollar. Meanwhile, gold prices soared, which revitalized investor appetite for alternative assets like Bitcoin. This highlighted once again the 'debasement trade' strategy—an investment approach that seeks to preserve asset value against currency devaluation. The underlying logic is that as fiscal burden increases and financial conditions ease, the investment appeal of scarce assets such as Bitcoin and gold rises.

In particular, the liquidation of short positions that had bet on a decline in Bitcoin also had an impact. According to Coinglass, on August 19 (local time), as Bitcoin prices surged, more than $1 billion in short positions were forcibly liquidated in just one hour. In the following 24 hours, the total value of bearish bets liquidated in the cryptocurrency market reached approximately $3 billion. As short positions were rapidly closed due to price increases, a 'short squeeze' occurred, further driving up the price.

Additionally, the crypto-friendly policy stance of U.S. President Donald Trump also played a positive role. President Trump once again urged Congress to pass the Clarity Act, a market structure bill for cryptocurrencies, reaffirming his administration's supportive policy stance towards cryptocurrencies. Lacey Jang, Research Analyst at Bitget Wallet, explained, "President Trump’s renewed push for bill passage is reducing risks from regulatory uncertainty. As regulations become clearer, institutional investors will be able to better assess the risks of investing in digital assets."

Bloomberg News pointed out that trends similar to past crypto bull markets have appeared during this rally. Historically, price increases have led to short position liquidations and capital inflows into spot ETFs, which in turn generated a virtuous cycle of further buying. Recently, as large-scale short positions were liquidated, spot trading volumes increased and new capital flowed into Bitcoin ETFs, suggesting that this pattern is resurfacing.

Market participants are forecasting that Bitcoin’s uptrend could continue. Geoffrey Kendrick, a researcher at Standard Chartered, analyzed that if the price of Bitcoin climbs higher, additional capital could flow in and leveraged investors might re-enter the market. In particular, he raised the possibility that Bitcoin could exceed the earlier year-end price prediction of $100,000. He stated, "For the first time this year, it seems that our end-of-year forecast ($100,000) may be too low. Investors are now recalibrating just how quickly Bitcoin’s price can rise, and after the one-year anniversary of its all-time high on October 6, the price could soar to the previous peak of $126,000 before the end of the year."

However, continued upward momentum will require sustained new demand. There is some concern, as much of the current rally is due to short position liquidations, and in previous instances this year, rebounds have faltered when new buying did not follow. Tanay Bed, Lead Analyst at Talos, commented, "There are also positive signals. As the rally progresses, we are seeing fresh buying activity, not just simple short position liquidations."

This content was produced with the assistance of AI translation services.