Bitcoin's Best Week in Years Puts $80K in Focus

Crypto Weekly Research

Bitcoin reclaims momentum as institutional flows return

Executive Summary

The cryptocurrency market staged a significant recovery last week, with Bitcoin recording its strongest weekly performance in more than two years. BTC gained approximately 23.4%, rising from around $63,100 on Monday 17^th August to currently $79,000, while briefly almost breaking through the psychologically important $80,000 level. Ethereum outperformed Bitcoin, gaining approximately 32% over the same period, from $1,900 on Monday the 17^th to now $2,500.

The rally was initiated by a combination of improving liquidity expectations, renewed institutional ETF demand, a weaker US dollar, positive US cryptocurrency regulation signals and significant short covering.

Most importantly, the move was accompanied by a substantial improvement in spot ETF flows. US-listed Bitcoin and Ethereum ETFs attracted approximately $2.6bn of combined net inflows during the week ended August 21, including $1.92bn into Bitcoin products and approximately $697m into Ethereum products. This was the strongest combined weekly inflow since October 2025.

The implication is important: last week's rally appears to have been more than a purely speculative move. Institutional spot demand returned at the same time as leverage was being unwound, providing a stronger foundation for the recovery.

However, the speed of the move also creates a near-term risk of consolidation. The key question for this week is whether ETF inflows and spot demand can remain strong enough to push Bitcoin through the $80,000 resistance zone.

1. Market Performance

Asset	Weekly performance	Key development
Bitcoin	+24.66%	Best weekly USD gain on record
Ethereum	+34.5%	Significant outperformance vs BTC
XRP	+49.32%	Strong altcoin participation
Crypto market cap	> $2.6tn	Broad market inflow

Bitcoin's move was particularly notable because it represented a gain of approximately $14,264 in a single week, its largest weekly dollar increase on record. BTC reached approximately $79,455 before consolidating.

Ethereum's performance was even stronger in percentage terms, reinforcing the view that capital was beginning to move beyond Bitcoin and into higher-beta segments of the crypto market including altcoins with lower market caps.

2. What drove the rally?

2.1 US Treasury liquidity expectations

One of the most important macro catalysts was the US Treasury's expansion of its longer-dated bond buyback programme.

The announcement was interpreted by markets as potentially supportive for liquidity and risk assets. Lower yields and expectations of greater liquidity can be particularly important for Bitcoin because crypto remains highly sensitive to changes in global liquidity conditions.

This helped create a broader "debasement trade", with investors simultaneously allocating towards Bitcoin, gold and other scarce assets.

The key point is that the catalyst was not specifically cryptocurrency-related.

Bitcoin benefited from a broader macroeconomic shift in investor preferences.

2.2 A weaker US dollar

The dollar also weakened during the week, reinforcing the appeal of alternative stores of value.

The relationship between Bitcoin and the dollar is not mechanically stable, but periods of dollar weakness have historically provided a favourable environment for risk assets and dollar-denominated commodities.

The combination can be interpreted as follows, which provided a particularly supportive dynamic:

Lower expected yields (due to government buybacks) + weaker USD + increased liquidity expectations (due to lower yields) = favourable macro environment for BTC.

Thus the US Dollar Index declined during the week while Bitcoin and gold both advanced strongly.

3. Institutional demand returns

Most notably even before the Bond buyback announcement was the BTC and Crypto ETF inflow and outflow data which showed increasing NET inflows into Crypto ETFs since Monday the 17^th of August.

DATA:

US spot Bitcoin ETFs  recorded approximately:

$1.92bn of net inflows

US spot  Ethereum ETFs data showed approximately:

$697m inflow

Together, that represents roughly:

$2.62bn of weekly institutional ETF inflows

This was the strongest combined weekly performance since October 2025.

This distinction is especially important because a cryptocurrency rally driven predominantly by perpetual futures, leverage and retail speculation is inherently fragile. Conversely, sustained spot ETF inflows represent actual demand for exposure to the underlying asset.

The next few weeks will therefore be critical.

If ETF inflows remain positive, the market can increasingly interpret the current move as a change in institutional positioning rather than simply a short-term trading rally.

4. Short covering amplified the move

The above 3 fundamental catalysts were reinforced by trader positioning.

Bitcoin had been trading the previous weeks with a significant amount of short positioning. Once BTC moved through important technical resistance levels, short sellers needed to cover their short positions.

That created a classic positive feedback loop:

Price rises then  shorts cover meaning buying increases and price rises further which causes additional short liquidations again pushing the price higher.

This mechanism explains the extraordinary speed of the move.

NOTE: short covering and liquidations are not sustainable demand.

Short covering and liquidations provides a powerful initial impulse, but usually this eventually disappears. Therefore, the market now needs new spot buyers to replace the leverage-driven buying that helped initiate the rally.

This factor can be said to be one of the more important variables to monitor for this week, as we are floating near the $80,000 level.

5. Ethereum and the broader crypto complex

Bitcoin's rally was initially the center of attention, but Ethereum's outperformance suggests that risk appetite broadened into ancillary markets.

ETH gained approximately +30% during the week, while several lower cap altcoins posted even larger gains. XRP, for example, rose roughly 50% from its August 17 low.

This type of market behaviour is generally consistent with an improving crypto risk cycle also called an altcoin cycle:

The further capital moves down this curve of riskier crypto assets, the stronger the evidence becomes that investor risk appetite is broadening and more money is flowing into these assets as traders demand a higher return albeit with higher risk.

6. Technical setup: $80,000 is the key test

Bitcoin is now approaching one of the most important psychological and technical levels in the market:

$80,000

BTC briefly traded around $79,455 before pulling back.

The reaction around $80,000 should provide important information.

Bullish scenario

A decisive break above $80,000 accompanied by:

• strong spot volumes
• continued ETF inflows
• contained funding rates
• rising open interest without excessive leverage

could  provide us the information that the market is entering a new phase of price discovery with the previous high at 82,500 being a level to regard a strong resistance.

Under that scenario, the next upside levels would potentially move towards $85,000–$90,000, if the current trend stays intact.

Consolidation scenario

After a move of more than 20% in a week, consolidation would be entirely normal.

A retreat towards the mid-$70,000s would not necessarily invalidate the bullish structure, particularly if ETF flows remain positive.

Bearish scenario

The more concerning setup would be:

failed $80,000 breakout + ETF outflows + rising leverage + stronger USD.

That combination would suggest that the rally was predominantly positioning-driven rather than supported by durable spot demand.

7. The weekend factor: crypto doesn't close

There is another structural characteristic of the cryptocurrency market that becomes increasingly relevant during periods of elevated volatility.

Crypto trades 24 hours a day, seven days a week.

Unlike equities, where Friday's closing auction effectively creates a weekend trading pause, Bitcoin and other major cryptocurrencies continue trading throughout Saturday and Sunday.

This creates a fundamentally different market structure.

Weekend liquidity can be thinner than during the main US and European trading sessions. Consequently, relatively modest changes in order flow can sometimes generate disproportionately large price movements.

For active traders, this creates both opportunity and additional risk.

A geopolitical development, regulatory announcement, liquidation event or sudden change in sentiment does not necessarily wait for Monday's European market open.

The crypto market can react immediately.

8. Why weekend access matters for traders

The past weekend provided a good example of this dynamic.

Following the week's sharp rally, Bitcoin experienced additional volatility as traders took profits and liquidity conditions changed outside traditional market hours.

For traders using our platform, this means the opportunity does not necessarily end when traditional financial markets close on Friday.

Crypto markets remain accessible over the weekend, allowing traders to react to price movements rather than waiting for Monday's market open.

For short-term traders, this can be particularly relevant around:

• Bitcoin and Ethereum breakouts
• weekend volatility
• geopolitical headlines
• regulatory announcements
• liquidation events
• changes in market sentiment
• technical support and resistance levels

The important point however is not that traders should trade more frequently.

Rather, as the market remains available when the opportunity or risk arises, traders have the chance to manage or initiate their positions accordingly, providing more flexibility to traders/.

9. What to watch this week

From a market perspective, five indicators are particularly important.

1. Bitcoin at $80,000

The market's reaction to this level should provide the clearest near-term indication of whether momentum can continue.

2. Spot ETF flows

Continued inflows could provide confirmation that institutional demand is supporting the rally.

3. Funding rates and open interest

If leverage increases too quickly, the probability of a sharp liquidation-driven correction rises.

4. US dollar and Treasury yields

The crypto rally remains closely connected to the broader liquidity environment.

A renewed rise in yields or significant dollar strength could challenge the current risk-on narrative, so news become important.

5. Ethereum relative performance

If ETH continues outperforming BTC, it would suggest that investors are moving further along the crypto risk curve.

Investment View

The speed of the move means investors should distinguish between momentum and confirmation.

The $80,000 level is now the key near-term test.

A sustained breakout accompanied by continued ETF inflows would strengthen the bullish case. Conversely, a rejection followed by ETF outflows and excessive derivatives positioning would raise the probability of a lower consolidation.

After one of Bitcoin's strongest weeks in years, that 24/7 market structure becomes particularly relevant.

Philip J Papageorgiou - Head of Investment Research

Find Philip on X (x twitter) - PhilipForexCom