Hey there, Bit2Mer! 👋
If Bitcoin has been all over the headlines lately, it's no coincidence. Between August 19 and 21, BTC went from trading sideways below $65,000 to touching nearly $79,500 — its highest level since June. The weekly gain sits around 24%: the biggest jump in more than two years.
Today we'll walk you through what happened and how the mechanisms behind it work — calmly, and without the hype. Because understanding the market always beats chasing it.
📊 What exactly happened?
The move came in two stages. On August 19 and 20, BTC broke out of its sideways range to clear $72,000, and total crypto market cap added more than $150 billion in a single day, pushing past $2.45 trillion. On August 21, the second wave hit: Bitcoin touched $79,200–$79,500 before settling around $78,000 (data as of August 21, 2026).
What's notable is that the rally didn't have a single lead actor. It was the convergence of at least five factors feeding off one another: a US Treasury decision, a cascade of short liquidations, political signals out of the White House, record inflows into spot ETFs, and a macro backdrop of dollar weakness.
Let's go through them one by one.
The trigger: the US Treasury and "cheaper" money
On August 19, the US Department of the Treasury announced it will at least double the size of its long-term bond buyback operations — from $2 billion to $4 billion per operation — starting September 9.
Translation? More liquidity in the system. After the announcement, the 30-year bond yield fell from 19-year highs, and the dollar index (DXY) dropped to three-month lows. Two days later, the Treasury Secretary reinforced the message: buybacks will become routine and could grow even larger.
When fixed-income yields fall and the dollar weakens, alternative assets — stocks, gold, and crypto too — tend to gain appeal. That was the starting gun.
🧲 What's a short squeeze, and why did it amplify the move so much?
Here's the most instructive part of this episode. In derivatives markets, some traders bet that price will fall — these are short positions. If price rises instead, those positions rack up losses and, past a certain point, get forcibly closed out. And how do you close a short? By buying the asset.
That sets off a domino effect: the rise forces shorts to buy, that buying pushes the price even higher, and the new price liquidates the next short in line. This is known as a short squeeze.
When Bitcoin broke above $65,000, it triggered the largest cascade of short liquidations since November 2021: more than $3 billion liquidated in 24 hours, roughly 92% of it bearish positions. In the aftermath, open interest — the volume of active leveraged positions — dropped by close to 15%.
One nuance worth remembering: this mechanism cuts both ways. The same leverage that accelerated this rally amplifies drops when the move runs in the other direction.
The institutional layer: the White House and the ETFs
That same August 19, Donald Trump hosted crypto industry executives at the White House alongside officials from the SEC and CFTC. Asked whether the US plans to acquire Bitcoin for its Strategic Reserve — created by executive order in March 2025 — he said "the possibility is being considered." He also called on Congress to pass the Clarity Act, the bill that would define which tokens count as securities versus commodities. Worth flagging: that bill is still pending in the Senate, with a procedural vote expected in September. For now, it's a regulatory expectation, not a done deal.
Meanwhile, US spot Bitcoin ETFs strung together two days of strong inflows: $517 million on August 19 — the largest daily figure in more than three months — and $606 million on the 20th. More than $1.1 billion across two sessions. Institutional demand didn't spark the rally — it amplified it.
⚖️ So what now? What's worth keeping in mind
Will it keep climbing? Will it correct? We don't know — and it's worth being wary of anyone who claims they do. What we do know is this:
- The volatility that drives a 24% weekly gain can produce equally sharp moves to the downside.
- Leverage events, like this week's short squeeze, say nothing about a crypto asset's long-term value.
- Even after the rally, Bitcoin still trades below its all-time high of $126,000, reached in October 2025. Cycles run long, and they run in both directions.
- The macro backdrop (rates, the dollar, liquidity) can shift on a single data point.
What's in your hands isn't guessing the next move. It's understanding how the market works, deciding based on your own situation and time horizon, and operating in an environment built to protect you. If you want to dig deeper, Bit2Me Academy has free guides on how Bitcoin works, how leverage works, and how market cycles play out.
Buying Bitcoin calmly (with regulation on your side)
Bitcoin is trending, and we know weeks like this spark curiosity. Our advice is the same as always: if you decide to buy, do it informed and through a serious platform.
With Bit2Me, you can buy and sell Bitcoin and 400+ crypto assets from the app in just a few steps. Spot purchases only — no derivatives, no leverage. And with the peace of mind of using the leading cryptoasset service provider, authorized and regulated by Spain's CNMV (National Securities Market Commission) under the EU's MiCA Regulation.
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