Bets on a weakening dollar pushed Bitcoin back above $80,000 for the first time since spring
Analysts warn that the traditionally low trading volumes above $80,000 could accelerate price movements in either direction
Bitcoin's rise last week was the fastest since the collapse of Silicon Valley Bank in 2023 / Photo: xlup / Shutterstock.com
On the morning of August 25, Bitcoin rose 2.8% to reach $81,092—its highest level since May 15. The price subsequently corrected to around $80,770. According to CoinMarketCap, Bitcoin has risen 5% over the past 24 hours, with weekly gains exceeding 25%. The CoinMarketCap 20 Index, which tracks a basket of the 20 largest cryptocurrencies, gained more than 27% over the week.
Over the past week, Bitcoin rose 23.6%. This marks its second-strongest weekly performance since February 2021: the only sharper rise during this period occurred after the collapse of Silicon Valley Bank in March 2023, according to CoinDesk. Ethereum gained 31.3% over the week.
Bloomberg attributes the renewed interest in Bitcoin to resurgent talk of betting on a weaker dollar. In the middle of last week, these discussions were fueled by a promise from U.S. Treasury Secretary Scott Bessent to increase Treasury buybacks in order to lower the cost of long-term borrowing. This triggered a new wave of selling of the U.S. dollar. An additional boost for the crypto market came from President Donald Trump’s meeting with industry leaders that same day.
The rally was also fueled by an influx of money into spot Bitcoin ETFs. Thirteen such funds trading in the U.S. attracted $1.92 billion over the past week—a ten-month high. The rally caught part of the market by surprise, according to Bloomberg: based on data from Coinglass, $7.2 billion in leveraged “bear” positions were forced liquidated across the entire crypto market over the course of the week.
Backroll Test
Bitcoin may trade within the $74,000–81,000 range in the near future, Coinbase reports, citing Ryan Lee, chief analyst at Bitget Research. So far, prices have been driven up in part by the closing of losing short positions, but for the rally to continue, the market now needs demand in the spot market, including purchases by institutional investors, Lee says. He acknowledges that traders may take profits on Bitcoin, which could cause the cryptocurrency’s price to drop to the $75,000–76,000 range.
Chris Sullivan of Hyperion Decimus believes Bitcoin is overbought, and the pullback is a necessary test of the current uptrend’s resilience. He believes the $67,000–70,000 range could serve as a support level. The analyst noted that during previous bear cycles, rallies triggered by the closing of short positions subsequently fizzled out completely.
Samir Kerbaj, Chief Investment Officer at Hashdex, believes that consolidation within the $75,000–83,000 range is beneficial: it would allow the market to build a foundation for the next rally. “Historically, trading volume has been very low in the $80,000 to $90,000 range, so prices typically move quickly through such thin zones—both up and down,” he explains. A sustained break above $83,000, in his assessment, could pave the way for a test of the $100,000 level.
This article was AI-translated and verified by a human editor
