Bitcoin continued its upward movement, posting its best weekly performance since 2023 as short-seller positions were heavily wiped out and exchange-traded funds attracted billions of dollars in new capital.
Over a seven-day period, the leading cryptocurrency traded 23% higher after surpassing $77,542, earlier reaching as high as $79,319. The market activity followed strong inflows into American exchange-traded funds, which took in over $1.6 billion during the week according to data from Farside Investors. On Thursday alone, the funds received $606.3 million, marking one of their largest trading days of the year.
According to CNBC analysts, the price increase was triggered by the U.S. Treasury Department's Wednesday announcement regarding plans to at least double the size of its long-dated bond buybacks. This announcement contributed to lower Treasury yields and a weaker dollar, which was trading at a three-month low and heading toward its worst week of August. Analysts noted that lower long-term yields reduce the opportunity cost of holding non-yielding assets and support broader risk-on sentiment.
The rapid price growth severely impacted traders betting against the cryptocurrency. Data from Coinglass indicated that over $1 billion in short positions were closed. In a research note published Friday, Standard Chartered Global Head of Digital Assets Research Geoffrey Kendrick stated that Thursday marked the largest liquidation of Bitcoin shorts ever, with $1.1 billion in bearish bets closed.
Prior to the recent rally, Bitcoin's volatility had declined significantly across June and July, with the asset primarily trading below $65,000.
Additional market support came from regulatory developments in Washington. President Donald Trump held a meeting with crypto executives earlier in the week and urged lawmakers to pass the Clarity Act. A vote on the legislation is scheduled for September.
