Bitcoin surged toward $80,000 on Friday, extending a three-day rally that reached a three-month high and liquidated over $4 billion in bearish bets. Data shows the cryptocurrency climbed as high as $78,449, gaining more than 10% over a 24-hour period before easing to $77,873.
The upward movement began on Wednesday after the US Treasury announced plans to at least double liquidity-support buybacks for 10- to 30-year government debt, pushing long-term yields lower and improving risk appetite. Momentum accelerated as President Donald Trump hosted crypto executives at the White House and urged Congress to advance the CLARITY Act, while regulatory agencies moved forward with additional industry-friendly proposals.
Institutional demand strengthened concurrently. Spot Bitcoin exchange-traded funds attracted more than $1 billion since Wednesday, adding fresh buying power as Bitcoin broke through previous resistance levels. CoinGlass data indicates that more than $4 billion in Bitcoin short positions have been liquidated since Wednesday as prices jumped from around $65,000 through $70,000 and above $75,000.
Market Indicators and Divergent Views
CryptoQuant's Bitcoin Bull Score Index climbed back to 60, marking its first return to bullish territory since October 2025. Six of the index's 10 components turned positive, including demand growth, stablecoin liquidity, and trader realized price.
Despite the broader recovery, some analysts remain cautious. Joao Wedson, chief executive of Alphractal, expressed skepticism that the current movement marks a durable trend change, viewing the event as a relief rally driven by short squeezes common in bear markets.
Nicolai Søndergaard, senior research analyst at Nansen, noted that short covering amplified the rally rather than solely creating it, with ETF inflows and spot demand helping Bitcoin reclaim its 20-week and 200-day moving averages. However, Søndergaard warned that momentum is now stretched, funding has turned positive, and leveraged traders are increasingly crowded long.
Political Momentum and Future Tests
Lacie Zhang, research analyst at Bitget Wallet, highlighted that Bitcoin is trading with a US political premium as the administration pushes for crypto legislation ahead of November's midterm elections. Analysts note that this political tailwind could also present a vulnerability if legislative progress stalls or regulatory momentum slows.
With the pool of vulnerable short positions shrinking, market participants suggest that further price gains will increasingly depend on sustained spot and ETF demand rather than forced short covering.
