Written by: angelilu, Foresight News
Just three days, only three days.
Bitcoin, like a rocket ignited, surged from a low of $64,100 on August 19th to $79,500 on August 21st (at the time of this article's publication, BTC had reached a high of $75,720, data updated) — a gain of over 20% in three days.
Just days ago, the market was still deeply mired in the quagmire of a "bear market." From fear (index 46) to greed (index 72), it took only three bullish candles.
The real numbers behind the market volatility are staggering. According to CoinAnk data, the total liquidation amount of crypto assets across the network once exceeded $4 billion, with short positions alone accounting for $3.7 billion, setting the most brutal short squeeze record since 2021.
Bitcoin's market cap is temporarily reported at $1.5 trillion, surpassing Meta's $1.39 trillion, ranking 13th in global asset market value. Bitcoin spot ETFs saw a total net inflow of $606 million yesterday, marking the fourth consecutive day of net inflows.
The total market cap of altcoins has returned to $1 trillion after nearly a month, with ETH, XRP, and other coins performing notably:
ETH surged 18% in a single day, up 25% weekly, currently at $2,361, hitting a new high in over two months;
XRP rose 20% in 24 hours, up 31% weekly, currently at $1.3, with a single-day market cap increase of about $10 billion;
HYPE rose 15% weekly, briefly touching $75, approaching its all-time high of $76.85;
SOL briefly broke above $90, up nearly 15% weekly.
For digital asset treasury companies, this rally directly altered the fate of their balance sheets. As of August 16th, Strategy held 840,447 BTC with an average cost of $75,385. With BTC's rise, this world's largest publicly traded Bitcoin holder has just broken even.
Why the Surge
The euphoria came so swiftly that everyone is asking the same question: Is the bear market really over?
This surge did not happen without reason. Macroscopically, on August 19th, the U.S. Treasury announced at least doubling its long-term bond buyback size from $2 billion to $4 billion per auction. The 30-year Treasury yield promptly fell from 5.337% to 5.187%, and the U.S. dollar index fell below 99—a signal of loosening liquidity gates.
On the same day, Donald Trump gathered a host of crypto industry leaders at the White House, from Coinbase's Brian Armstrong to Ripple's Brad Garlinghouse, urging the Senate on the spot to advance the CLARITY Act, and mentioning that the U.S. is considering purchasing a "sizeable amount" of Bitcoin reserves.
Just the day before, on August 18th, the U.S. SEC had thrown out a new regulatory framework proposal, loosening the soil for compliance pathways.
On August 21st, U.S. regulatory actions continued, releasing favorable signals. CFTC Chairman Michael Selig dropped an even tougher statement at the agency's inaugural Innovation Advisory Committee meeting: if the CLARITY Act "continues to stall due to Democratic obstruction, the CFTC will use its existing authority to begin establishing a system for the crypto asset market."
He said he has directed staff to begin studying rules to use existing powers to solidify the crypto market structure, covering crypto exchanges, leveraged and margined trading, and compliance pathways for developers of on-chain financial protocols.
Whales Are Gambling with Real Money
This surge was also accompanied by a bloody short squeeze, with a large number of short positions forced to liquidate, which was also a structural market factor in this rally.
Since July 8th, Bitcoin had been languishing for a long time within a narrow range of $62,000 to $66,900. The six-week buildup of confidence among shorts was shattered as prices rose.
According to Lookonchain data, the three addresses with the largest short liquidation losses were all in the hundreds of millions. Address 0x8c96... was liquidated for 1,829 BTC, approximately $120 million; pension-usdt.eth had 49,808 ETH liquidated, approximately $111 million; address 0x8eff... was liquidated for 1,343 BTC, approximately $92.56 million.
A typical casualty was the well-known Chinese community whale "先定 10 个大目标" (Set 10 Big Goals First). On August 19th, he just made $20 million from a long position, then turned around and went short at high levels, opening a total of $222 million in BTC and ETH short positions. After the price surged, on August 20th he was forced to close his position, giving back $6.28 million.
But he didn't stop. On August 21st, he charged ahead again, shorting once more—opening a total of approximately $17.9 million in BTC and ETH shorts, with an average BTC entry price of $74,506.57 and an ETH entry price of $2,346.83.
Amid the surge, some whales chose to cash out at highs, while others chose to add short positions at highs: two whale addresses sold 5,250 ETH and 550 BTC, profiting $6.26 million; another address that had previously accumulated a long position of 120,000 ETH reversed and added long, with two wallets holding a combined $182 million long position at an average entry price of around $2,265.
What Do Analysts Think
On-chain liquidation and position change records sketch out the micro-battlefield of this rally—shorts being slaughtered, longs diverging, some fleeing and some doubling down. But what do these fragmented individual behaviors, pieced together, point to? What do analysts think?
The optimistic side is full of confidence. Bitwise research analyst Ishmael Asad stated he would view this move as "the strongest confirmation so far that the bottom is in," with institutional allocation just beginning and long-term fund inflow potential still ahead.
Coinbase CEO Brian Armstrong declared, "We could very well be on the eve of the next crypto spot trading bull market";
Trader mignolet publicly corrected himself, saying he hadn't expressed a bullish view since August 2025 but now admits his previous judgment was wrong. The current rebound could last longer, and he no longer expects an easy breakdown. He announced turning bullish on Bitcoin from now on and stopping shorting.
CryptoQuant founder Ki Young Ju stated that spot and perpetual contract demand turned positive simultaneously for the first time since the historical high in October 2025. The bear market has ended, and a new bull cycle has begun.
On the institutional side, Standard Chartered's Head of Digital Asset Research, Geoff Kendrick, gave a year-end target of $100,000, while Risk Dimensions CIO Mark Connors even called for BTC to reach $180,000 to $360,000 by 2030.
Analyst Beth Kindig, known as the "Queen of Nvidia," posted that the I/O Fund has raised its long-term Bitcoin price target from $1 million to $2 million.
However, some analysts cautioned against chasing highs hastily. Smart Money stated this rebound is not a bottom bounce but a "trap" surrounding the September CLARITY Act vote, bouncing from support, attracting short positions, and clearing leveraged accounts. The 4-hour RSI indicator is at 92.6, yesterday morning it was 82.8, in overbought territory. They advise not to chase highs for now, observing if it can hold above $73,244.
Trader Peter DiCarlo believes long-term bullish, short-term bearish. He stated Bitcoin could look towards $80,000 from here. Long-term, he is still bullish, believing new all-time highs will be reached within 12 to 18 months, but the internal structure is still bearish at present. Price is pushing into short-term "smart money zone" resistance. For the internal structure to change, a valid breakout above $85,000 must be seen.
The Next Key Date: September 15th
In three days, Bitcoin nearly recovered two months of losses. After a massive clearing of short positions, the real test is just beginning—the baton must be passed to sustained real buying.
The market will now focus on verifying a few things: whether spot Bitcoin ETF net inflows can remain positive consecutively; whether the price can effectively break and hold above the important resistance zone of $78,000–$80,000; whether it can continue to attack the average cost line of all active investors (approximately $75,800); and the result of the U.S. Senate vote on the CLARITY Act on September 15th.
