Bitcoin’s roughly 25% rise in August has brought the market back to a level that could determine whether the rally develops into a sustained recovery or repeats the sharp rejection seen earlier this year. After briefly reaching about $81,500, Bitcoin consolidated between $77,000 and $79,000, leaving the $81,000 to $82,000 range as the immediate barrier for buyers.
The area carries unusual technical and positioning weight. It overlaps Bitcoin’s 50-week moving average and sits near a price zone that rejected advances earlier in the year before a slide toward $57,000-$58,000. The $82,500 area also represents an estimated aggregate cost basis for U.S. spot Bitcoin ETF holders, putting a large group of recent buyers close to break-even if the price returns to that range.
Bitcoin’s August advance was its strongest performance for that month since 2017 and its best monthly gain since November 2024. The move was accelerated by one near-12% gain in a 24-hour period, when falling long-dated Treasury yields, regulatory headlines from Washington and a wave of derivatives liquidations converged.
Treasury operations and policy headlines supported risk appetite
The Treasury raised its per-operation limit for liquidity support in the 10- to 30-year maturity segment to at least $4 billion. The adjustment arrived after the 30-year Treasury yield reached a 19-year high. That yield subsequently fell by 10 basis points before recovering within a day, underlining how sensitive long-term government borrowing costs remain to changes in Treasury operations.
Treasury Secretary Scott Bessent later said capacity could exceed $4 billion and pointed to the Treasury General Account, which he said held roughly $1 trillion, as a possible source of larger repurchase operations. Treasury buybacks can improve market liquidity by allowing the government to repurchase older, less actively traded bonds, though they do not necessarily signal a change in the direction of monetary policy.
The fiscal backdrop remains tight. The Congressional Budget Office’s 2026 baseline projected that federal interest costs would consume more than 20% of tax revenue, leaving markets attentive to any policy measure that could relieve pressure in the long-dated Treasury market.
Crypto policy provided a second catalyst. The U.S. Securities and Exchange Commission proposed a “crypto asset regulation” framework that would permit annual token issuance of up to $75 million without full registration. President Donald Trump also met the heads of the SEC and Commodity Futures Trading Commission alongside crypto executives and urged the Senate to act before a Sept. 15 vote on the CLARITY bill.
The CFTC indicated that Hyperliquid could be brought into a U.S. regulatory framework through a compliance-focused route. Yet markets tied to the legislative timetable assigned the CLARITY bill only about a 13% chance of passage, suggesting traders remain cautious about treating Washington’s rhetoric as a completed regulatory breakthrough.
Short liquidations amplified the advance
Derivatives positioning added force to Bitcoin’s move. About $1.4 billion in Bitcoin short positions were closed during August, placing the event among the sector’s largest liquidation episodes. A short squeeze occurs when traders betting on lower prices must buy the asset to close losing positions, which can intensify a rally without necessarily creating lasting spot demand.
U.S. spot Bitcoin ETFs also recorded more than $3.05 billion in August net inflows, their strongest month since October 2025. About $1 billion entered during the first two weeks alone. Those flows gave the rally a steadier source of demand than derivatives liquidations, although the pace of ETF buying will be closely watched if Bitcoin retests the high-$70,000 range.
Bitcoin remained above its 50-day and 200-day moving averages following the rally. It traded about 20% above its 200-week moving average near $65,500 and roughly 46% above realized price near $53,000, an on-chain metric representing the average price at which coins last moved.
Those gaps show how far Bitcoin had moved from longer-term cost benchmarks. They also leave room for volatility if recent buyers take profits or leveraged positions begin to unwind.
$76,000 support faces an early test
The first major support zone sits between $76,000 and $78,000, where Bitcoin had previously faced resistance earlier in the summer. A sustained hold above that area would keep the August breakout structure intact. Failure to do so could shift attention toward $68,500, identified as a short-term holder cost basis, followed by the 200-week moving average zone around $65,000-$60,000.
Momentum had already become stretched during the initial breakout. Bitcoin’s relative strength index rose above 80, its highest reading of the year. Perpetual futures funding rates stood near 10% annualized, meaning bullish leveraged traders were paying shorts to maintain long positions.
Total futures open interest was about $54 billion, below the prior-cycle peak of $70 billion but high enough to leave the market exposed to sudden moves in either direction. The combination of elevated funding and large open interest makes a clean breakout above $82,000 less straightforward than August’s initial squeeze.
Short-term holders have also increased profit-taking. They were sending more than $500 million of Bitcoin per day in realized gains to trading venues, roughly four times the earlier-August pace and the heaviest level since December. That activity could create supply near the recent highs, particularly if macroeconomic data pushes expectations toward tighter U.S. monetary policy.
Market pricing cited in the supplied material placed the chance of a rate increase at the next Federal Open Market Committee meeting near 65%. Rising oil prices and higher Treasury yields have reinforced concerns that inflation could remain difficult to contain, limiting the case for rapidly cheaper borrowing costs.
Ether and Solana broadened the rally
The August move was not limited to Bitcoin. Ether reclaimed $2,000 and traded in the $2,400-$2,500 area, while ETH/BTC rose above 0.03 for the first time in about four months after bottoming near 0.024. The shift suggested that traders were willing to add exposure beyond Bitcoin after months of relative underperformance by larger alternative assets.
Ethereum’s network data pointed to a mixed picture. Fee revenue was down 69% year-on-year, while monthly active addresses rose 15% to 8.4 million and smart-contract deployments increased 74% to more than 1.3 million. Stablecoins on Ethereum reached about $156 billion, up 22%, while the network held a 47% share of the estimated $34 billion tokenized real-world-asset market.
Solana rose from the low-$70 range to about $110. The network processed a reported record 1.17 billion transactions in the second week of August, while weekly decentralized-exchange volume exceeded $20 billion. Its DEX volume share reached 40%, according to the figures cited in the supplied material.
The broader market’s ability to hold those gains now depends heavily on whether Bitcoin can absorb profit-taking below $82,000. A successful break and consolidation above that band would put August’s ETF flows and improving risk appetite to a more demanding test; another rejection would leave the $76,000-$78,000 support zone as the market’s first measure of whether the rally has durable backing.
For deeper context on this rally and what comes next, check out key resistance levels and refine your strategy.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
