On Monday, Bitcoin came close to reaching the $80,000 mark as the cryptocurrency market appeared to be recovering from a weekend dip that saw several high-cap altcoins retreat from multi-month highs. Market data shows that after briefly falling below the $77,000 level two hours before midnight, Bitcoin rebounded and mostly hovered just below the $77,500 mark until around 7:30 AM Eastern Standard Time (EST).
Shortly thereafter, the Bitcoin price echoed the previous week's bullish market, sharply rising to just below $79,200 before a rapid sell-off pushed it back to the $78,200 level. A second surge pushed prices higher, bringing Bitcoin back to the $79,000 mark and reaching a new August peak of $79,989. However, a second wave of profit-taking quickly returned the cryptocurrency to around $79,200.
Despite this, the Bitcoin price momentum over a 24-hour period secured a daily gain of approximately 3% and lifted its market capitalization to $1.59 trillion. The latest rally also, for the first time since mid-May, reduced Bitcoin's annual losses to below 10%, encouraging investors firmly convinced that the cryptocurrency will finish 2026 in the green.
A familiar pattern emerged in the derivatives market: liquidated short positions exceeded liquidated long positions. However, data from Coinglass shows that the value of short positions liquidated over 24 hours was noticeably lower than the hundreds of millions liquidated last week. According to the data, liquidated short positions exceeded $98 million compared to $45.3 million in liquidated long positions. Overall liquidation volume in the cryptocurrency market exceeded $396 million, with liquidated short positions accounting for $222 million.
Although the failure to break through the $80,000 level last week was attributed to profit-taking, Bitcoin's latest surge suggests it may overcome this threshold and possibly revisit its January high by the end of the month.
Analysts point to the US Treasury Department's plans for bond buybacks and subsequent remarks by Treasury Secretary Scott Bessent hinting at even larger-scale buybacks as the primary reason for this flight to alternative assets like gold and cryptocurrency. As economist and Trump administration critic Peter Schiff explained, the Treasury Secretary's "reckless plan" will lead to what he has long warned about.
"This reckless plan will substantially shorten the average maturity of the national debt, increasing our vulnerability to rising short-term rates and making it even more difficult for the Fed to raise rates without sharply increasing federal interest expenses and the budget deficit. This is a recipe for massive quantitative easing and runaway inflation. Do you own gold?" Schiff wrote on X.
Accelerated currency issuance and associated inflationary pressures are breathing new life into the concept of Bitcoin as "digital gold," bolstering arguments for institutional investors and corporate boards to adopt the cryptocurrency as a strategic reserve asset.
Meanwhile, Bitfinex analysts assert that continued real spot demand, replacing "short squeezes," is still necessary for the rally to persist. They pointed out key indicators to watch for confirmation of the rally.
"Two clear signals can be expected in the coming weeks. On the positive side: a weekly close above the roughly $73,500 mark—the average price paid by buyers over the last three to six months—followed by a successful retest of that level would confirm recovery. The next level above is around $86,500, where buyers who transacted from 18 months to two years ago are still waiting to break even," the analysts explained in their latest report.
"On the other hand, a drop below the approximately $64,500 mark—the average price paid by the most recent cohort of buyers—would signify that the rally was overvalued due to forced buying and would return the market to its summer range," the market strategists added.
