Bitcoin recorded its largest one-week dollar gain in history, rising $14,775 to close the week at $77,593 from $62,818, according to Galaxy Research. The move represented a 23.5% weekly increase, the strongest percentage gain since March 2023.
Market Drivers
The rally coincided with two significant developments. The US Treasury announced it would double its long-bond buyback operations to ease pressure on Treasury yields. Additionally, President Trump urged Congress to pass the CLARITY Act, which would establish federal rules for classifying digital assets as securities or commodities.
The price surge triggered a short squeeze, with roughly $2.7 billion in short positions liquidated across crypto markets during the week, according to CNBC. Market sentiment shifted sharply, with the Crypto Fear and Greed Index reaching 74 on August 25, its highest level since October 2025.
ETF Inflows Return
Spot Bitcoin ETF inflows reached their strongest level since October 2025 during the same period, Galaxy Research data shows. August is on track to post the biggest monthly net inflow since Bitcoin's prior all-time high, reversing months of ETF outflows that had made the funds net sellers in 2026.
Despite the rebound, ETF holders remain approximately 6% underwater on average. Their average cost basis stands at $84,029 against a spot price of $78,955, according to Galaxy Research.
Bitcoin's spot price traded above $80,000 on Thursday. The sustainability of the rally may depend on whether ETF inflows continue into September and whether the short squeeze proves lasting.
