Bitcoin (BTC) Rallies 25% as ETF Inflows Hit 5-Month High Near $80K

Key Highlights

Table of Contents

BTC rallied approximately 25% this week, climbing to nearly $80,000 following the U.S. Treasury’s decision to expand buyback operations on long-term bonds
Approximately $4 billion worth of short positions in cryptocurrency markets were forcibly closed as prices climbed
Bitcoin exchange-traded funds in the United States recorded $1.6 billion in net positive flows over the past week
Strategy’s Bitcoin portfolio of 840,447 BTC has returned to profitability with unrealized gains exceeding $2 billion
Market experts attribute the price surge partly to massive short squeezes rather than solely macroeconomic improvements

Bitcoin experienced a remarkable surge of approximately 25% over the past week, breaking through $78,000 and briefly touching $79,500, following a strategic adjustment by the U.S. Treasury that helped reduce long-term government bond yields from nearly two-decade highs.

Treasury officials revealed plans to expand their repurchase program for longer-maturity government securities, increasing the purchase volume per operation from $2 billion to $4 billion. This policy adjustment contributed to a decline in the 30-year Treasury yield from 5.34% down to approximately 5.19%.

BREAKING: US Treasury Secretary Bessent says Treasury buybacks announced yesterday could now MORE than double, exceeding $4 billion per operation.
Bessent said buybacks will increase “by at least double,” adding, “we have a big toolkit, so we’ll see.”
This comes just hours… https://t.co/SLNs0MfTgD
— The Kobeissi Letter (@KobeissiLetter) August 20, 2026

This development initiated a cascade of forced position closures as traders holding bearish positions faced margin calls. Data shows that roughly $4 billion in short cryptocurrency positions were liquidated during Thursday and Friday’s trading sessions.

Market observers were measured in their assessments. Shawn Young, chief analyst at MEXC Research, commented that “The Treasury released some pressure, and the crypto market reacted as if fundamentals had completely shifted.” He cautioned that Bitcoin’s advance toward $70,000 may be premature considering Treasury securities still offer yields approaching 5%.

Jeff Ko, chief analyst at CoinEx, characterized the buyback expansion as “more of a signal, a gentle backstop for long-duration bonds,” emphasizing it shouldn’t be confused with actual quantitative easing or a fundamental change in liquidity conditions.

Exchange-Traded Funds Show Robust Demand

Spot Bitcoin ETFs trading in the United States accumulated $1.6 billion in net positive flows throughout the week. BlackRock’s IBIT product alone attracted $503 million on Thursday. Total ETF holdings surpassed $85 billion, marking a substantial increase from approximately $70 billion in June.

ETFs bought $1,920,000,000 in $BTC this week.
Biggest weekly inflow since October 2025. pic.twitter.com/c8rbuSmsRF
— Ted (@TedPillows) August 22, 2026

Market analyst Ted Pillows highlighted on X that ETFs purchased $1.92 billion worth of BTC during the week — marking the strongest weekly accumulation since October 2025. He observed that Bitcoin successfully cleared multiple resistance barriers, with the $78,000–$80,000 range emerging as the crucial zone. Sustained trading above this level, according to Pillows, would signal a definitive end to bearish market conditions.

$BTC weekly candle is just insane.
Breaking above every resistance level like it's nothing.
Now, Bitcoin is moving towards its $78,000-$80,000 resistance zone.
A reclaim of this will confirm the end of this bear market. pic.twitter.com/lxvivlLMkb
— Ted (@TedPillows) August 21, 2026

Investment research firm Bernstein attributed the price recovery to enhanced market liquidity, renewed ETF appetite, and increasingly favorable regulatory conditions. Their analysts anticipate expedited rulemaking from the SEC and CFTC covering tokenized securities and prediction market frameworks.

Strategy’s Holdings Return to Profitability

Strategy maintains a position of 840,447 BTC bought at an average cost basis of $75,385. With Bitcoin currently trading around $78,000, the company’s holdings show an unrealized gain surpassing $2 billion.

The company recently liquidated approximately 0.8% of its Bitcoin position to fund dividend distributions and repurchase its STRC preferred shares. Bernstein analysts project that Strategy will restart accumulation once STRC trades closer to its $100 par value.

Ko identified Bitcoin’s 200-day moving average, positioned near $69,000, as the critical technical threshold. Bitcoin has successfully reclaimed this level, though it must maintain support while competing against government bonds offering nearly 5% yields to investors.