Bitcoin pushed past $80,000, hitting its strongest level in more than three months as a softer U.S. dollar helped reignite buying across the crypto market. BTC reached $81,200 before settling near $80,300, extending its weekly gain to about 16%.
The latest rally has been supported by two major catalysts: continued demand for U.S. spot Bitcoin ETFs and a wave of short-position liquidations as the cryptocurrency moved higher.
The U.S. Treasury recently doubled its longer-term bond buyback operations from $2 billion to $4 billion. While the move does not inject money directly into the financial system, it could ease longer-term borrowing costs and produce an effect that markets view as supportive of liquidity.
The announcement also brought renewed attention to the debasement trade. Investors using this strategy typically favor scarce assets that could retain value amid concerns about currency depreciation, inflation and rising government debt. Bitcoin’s fixed supply of 21 million coins makes it particularly attractive within that narrative.
Bitcoin’s advance coincided with weakness in the dollar. The ICE U.S. Dollar Index fell 0.8% over the week following the Treasury announcement, while gold moved above its 200-day moving average near $4,518 per ounce.
Short sellers also contributed significantly to the move. Roughly $1.5 billion worth of Bitcoin short positions were liquidated during the rally, with about $700 million wiped out in only one minute. Closing a short position requires traders to buy Bitcoin, potentially creating additional demand and accelerating price gains.
ETF inflows have provided another important source of buying pressure. Spot Bitcoin ETFs allow investors to gain exposure through conventional brokerage accounts without having to purchase and custody Bitcoin directly, potentially bringing additional institutional and traditional-market demand.
Treasury Buybacks Fail to Ease Bond-Yield Pressure
The Treasury plans to begin its larger purchases of longer-dated government bonds on September 9, describing the program as a way to improve Treasury-market liquidity. However, the initial rally in bonds quickly lost momentum.
The 10-year Treasury yield climbed to 4.737%, while the 30-year yield reached 5.276%, according to Dow Jones Market Data cited by MarketWatch. Both yields moved back toward levels seen before the Treasury revealed the expanded buyback plan.
Ian Lyngen, BMO’s head of U.S. rates strategy, said concerns about de-dollarization, U.S. creditworthiness and a potentially higher term premium were still weighing on bonds. His comments indicate that the buyback expansion has not fundamentally changed the factors driving yields higher.
Should Bitcoin maintain its breakout above $80,000, the next significant resistance area could be between $95,000 and $100,000. Whether the cryptocurrency can sustain the momentum remains uncertain.
For now, the August rally illustrates how ETF demand, macroeconomic shifts and leveraged positioning can combine to produce a rapid Bitcoin surge. At the same time, the cryptocurrency’s fixed supply continues to strengthen its appeal as investors assess inflation and potential weakness in the U.S. dollar.
