Bitcoin’s 24% rally faces $70K test as yields rebound: analysts

Bitcoin’s strongest weekly advance since March 2023 pushed the asset close to $80,000, but analysts said further gains may depend on easing US bond yields, continued spot ETF demand, and progress on the CLARITY Act.

Can Bitcoin hold near $80,000 after its strongest rally since 2023?

Bitcoin (BTC) traded near $79,800 on Aug. 24 after climbing from below $64,000 on Aug. 19. The cryptocurrency reached approximately $79,550 during the rally, its highest level since May.

The gain amounted to roughly 24% over the week, according to Gadi Chait, investment manager at Xapo Bank, making it Bitcoin’s strongest weekly advance since March 2023.

US policy developments helped trigger the move. On Aug. 19, the US Treasury announced that it would at least double the maximum size of its liquidity-support buybacks for nominal Treasury securities with maturities of 10 to 30 years.

The operations will increase from a maximum of $2 billion to at least $4 billion each, beginning Sept. 9. Markets interpreted the decision as an effort to improve liquidity in long-dated government debt after yields reached levels that weighed on risk assets.

Bitcoin also benefited from renewed expectations for clearer US crypto rules after President Donald Trump urged lawmakers to advance the CLARITY Act. The proposed legislation remains subject to action in the Senate, where its progress could provide the market with another policy catalyst.

ETF inflows strengthened the Bitcoin rally

Chait said the sources of demand behind the rally were as important as the size of the price increase.

“Approximately $1.9 billion flowed into US spot Bitcoin ETFs, providing evidence of genuine investor demand, while record short liquidations added further momentum.”

US spot Bitcoin ETFs recorded five consecutive trading days of inflows during the week ending Aug. 21. The approximately $1.9 billion total marked a sharp return of institutional demand after funds struggled to attract consistent capital earlier in the year.

The inflows also showed that forced buying in derivatives markets was not the rally’s only source of support. Traders holding leveraged short positions were liquidated as Bitcoin broke through resistance levels, creating additional market orders that accelerated the advance.

Justin d’Anethan, head of research at Arctic Digital, said changing expectations around US rates brought investors back to an asset that had underperformed for several months.

“In the case of Bitcoin, with pent-up demand and a multi-month underperformance, the trade wrote itself and algos along with sophisticated trading firms and asset managers piled back in.”

He said leveraged traders were caught on the wrong side of the breakout, producing what he described as the largest single-day short liquidation event. Profit-taking and selling from investors who had been waiting to exit could now produce a short-term pullback as the market absorbs the move.

Rising bond yields test the Treasury narrative

Jeff Mei, chief operating officer of crypto exchange BTSE, said enthusiasm surrounding the Treasury buybacks had cooled as bond yields began rising again.

“The size of these buyback operations is relatively small compared to the overall Treasuries market, which is over $30 trillion.”

Treasury buybacks are designed to support market liquidity by replacing older, less actively traded securities with newly issued debt. They do not amount to quantitative easing because the Treasury must finance its operations, while Federal Reserve asset purchases create central bank reserves.

Mei said the market would need to see whether the Treasury expands the program beyond the initial $4 billion maximum for each operation. Without an increase, the program’s effect on the broader bond market may remain limited.

D’Anethan viewed rates as the rally’s main driver, arguing that ETF flows, regulatory developments and large investor activity had failed to move Bitcoin substantially until expectations surrounding Treasury policy changed.

Chait said the macro shift also strengthened Bitcoin’s longer-term case as US government debt continued rising.

“As rising debt fuels concerns about potential currency debasement, its fixed supply and independence from any government or central bank become increasingly relevant.”

Bitcoin could reach $90,000 if US catalysts hold

Mei said Bitcoin could establish a range between $80,000 and $90,000 if the Treasury expands its buybacks and the CLARITY Act makes material progress by mid-September. A Federal Reserve rate cut or another form of monetary support could provide further upside, he added.

The scenario remains conditional because higher yields increase the relative appeal of government debt while raising borrowing costs across the financial system. A lack of new policy support or weakening ETF demand could therefore leave Bitcoin vulnerable after its rapid advance.

“Without further positive catalysts and sustained investor confidence, it’s also possible that Bitcoin could give back recent gains and fall again to the $70k mark,” Mei said.

The CLARITY Act provides another near-term US catalyst, although its passage is not guaranteed. Investors will be watching whether lawmakers move the bill forward and whether proposed rules translate into clearer conditions for exchanges, token issuers and institutional market participants.

Bitcoin charts point to a possible trend reversal

D’Anethan said bullish engulfing patterns had appeared on Bitcoin’s daily and weekly charts, while a similar monthly signal was developing but had not yet been confirmed by the candle’s close.

The patterns followed an extended period in which several momentum indicators remained in oversold territory. Their recovery may support a longer-term reversal, although the speed of the recent rally increases the possibility of consolidation or profit-taking.

Bitcoin’s immediate challenge is holding the area around $77,000 to $80,000 after reaching its three-month high. A sustained break above $80,000 would support Mei’s $80,000–$90,000 scenario, while a deeper retracement would bring $70,000 back into focus.

The mid-$60,000 range could become a broader accumulation area for long-term investors if Bitcoin fails to hold $70,000, according to d’Anethan. Near-term direction, however, will likely depend on bond yields, ETF demand and whether US policy developments produce concrete action after the initial rally.