Bitcoin's rise to a multi-month high has resulted in all buyers from the last five months achieving paper profits. On August 21, the price reached a peak of $79,491, and analysts from the cryptocurrency exchange Bitfinex stated that the movement was driven by spot demand and short covering, not by new leverage usage. Rallies built on borrowed funds tend to end faster than those based on cash purchases.
In a statement to Bitcoin.com News, Bitfinex analysts noted:
"A squeeze-driven rally is typically accompanied by the question of whether it will hold, as the main burden is borne by liquidations."
"In this case, a combination of ETF demand, macroeconomic shifts, and the absence of massive sell-offs provides this rally with a longer runway for growth with minor corrections along the way," they added.
What Led to Lower Yields and Higher Bitcoin
On August 19, the U.S. Treasury Department announced it would double the maximum size of bond buybacks under its long-term liquidity support program. Each operation will now reach at least $4 billion instead of the previous $2 billion, with the increased volumes effective from September 9 to November 4.
Liquidity conditions have determined the price of $BTC for a decade, and Bitcoin's four-year cycle of booms and busts serves as the historical context for these changes. Since 2015, global liquidity indices have shown a correlation with Bitcoin of approximately 90%, while cheaper funding on the long end of the curve tends to support risk assets.
The first blow to short positions came on August 19 when Bitcoin surged to $69,749, resulting in the liquidation of about $1.48 billion worth of cryptocurrency positions within an hour, most of which were shorts. On the same trading day, spot Bitcoin ETFs attracted $297.6 million. This squeeze provided the first stage of growth, with further gains supported by cash-paying buyers.
Spot Purchases or Leverage: How to Tell Them Apart
Open interest measures the total value of outstanding futures contracts and increases when traders boost leveraged positions. A rally where price and open interest rise simultaneously is driven by borrowing. A rally where price rises while open interest lags is driven by cash.
"The shape of the move is the key to understanding. Rallies built on new leverage usage are characterized by open interest spiking in sync with the price. The price rose 10–11 percent, while open interest (OI) grew by only about 4 percent, indicating that spot market purchases and short covering are playing the primary role, with leverage usage being secondary," noted the exchange's analytics team, adding:
"A weaker version of this pattern is open interest accumulation amid price stagnation, but that did not happen in this case."
Why the $68,000 Mark is Decisive for the Next Move
Buyers from the last five months have an aggregate cost basis in the $68,000 to $69,000 zone—a level Bitfinex highlights as the most important line on the chart. Trading Bitcoin above this mark allows this group to stay in profit and removes the pressure that forces loss-making buyers to sell on any bounce.
The all-time high of $126,000 recorded in October 2025 was followed by a decline that brought $BTC close to $64,000 earlier this month. This story has been shaped by five boom-and-bust cycles, each redistricting coin ownership across price levels.
What U.S. Buyers Need to Prove This Week
On August 20, U.S. spot Bitcoin ETFs attracted $606.29 million—the largest single-day inflow since May 1, with BlackRock's IBIT accounting for 82% of the total. The net assets of all funds reached $90.16 billion, while Ethereum products attracted $220.77 million.
Analysts estimate that if this pace continues throughout the week, it will solidify price support and signal a real shift in demand structure. August 20 marked the fourth consecutive session with inflows. Whether this momentum persists in the coming week will determine the sustainability of the current rally.
The Coinbase Premium Index shows whether U.S. buyers are paying more for Bitcoin than traders on overseas platforms. From May 19 through the end of July, it remained negative in every session—a record period exceeding 70 trading days. Bitfinex views the index's return to positive territory as clear confirmation that U.S. demand has recovered.
What Could Halt the Rally
On August 20, Treasury Secretary Scott Bessent told CNBC that buyback operations could exceed $4 billion per issuance. The yield on 30-year bonds reached approximately 5.33% at the start of the week before falling 8–10 basis points after the Treasury confirmed larger operations. Long-term bonds remain a pressure factor for risk assets.
The Bitfinex team warned:
"The obvious risk lies in the volume of Bitcoin sent to exchanges for profit-taking during this move, which could turn into the largest wave of profit-taking this year if it indeed materializes."
A recovery in real yields to levels that held Bitcoin below $65,000 in July would pose a more serious test for the rally than any on-chain signal. On August 4, Bitfinex analysts warned that the market remains dependent on macroeconomic factors, with pressure from long-term bonds directly impacting price. According to Treasury data published on August 19, national debt exceeded $40 trillion for the first time.
