Bitcoin approached $80,000 and had its best week since 2023. What's next?

Bitcoin rose 25% over the past week, posting its best weekly performance in more than three years, according to Bloomberg. The rally began after the U.S. Treasury announced an expansion of its long-term bond purchase program, and U.S. President Donald Trump expressed support for advancing a bill to regulate the cryptocurrency market. However, analysts warn that it is still too early to speak of a return to a sustained “bullish” trend for Bitcoin.

Over the past 24 hours, according to data from CoinMarketCap, Bitcoin jumped nearly 8% and reached a high of over $79,240. And since the start of the week, the leading cryptocurrency has risen in price by about 25%. Bloomberg calls this weekly gain the largest since March 2023.

“The main driver [for Bitcoin] was the U.S. Treasury’s decision to double its purchases of long-term bonds [to $4 billion], which led to [a slight] decline in long-term bond yields [from multi-year highs] and, overall, increased investors’ risk appetite,” says Rachel Lucas, an analyst at BTC Markets. She noted, however, that the Treasury Department’s decision did not change either Bitcoin’s long-term outlook or its volatility.

Another factor driving growth was U.S. President Trump’s meeting at the White House with executives from cryptocurrency companies, including the CEOs of Coinbase and Payward. During the event, Trump called on Congress to pass the Clarity Act—a bill intended to establish clearer rules for the cryptocurrency market.

The return of euphoria to the cryptocurrency markets has forced traders to liquidate billions of dollars in short positions on Bitcoin, according to Bloomberg. According to Coinglass, bets on a Bitcoin decline totaling approximately $2.5 billion have been liquidated over the past three days, while bets on a decline across all crypto assets totaled $4.5 billion. The short squeeze remains one of the main drivers of Bitcoin’s rise in recent days, notes Adam Morgan McCarthy, a senior researcher at LO:TECH. Therefore, in his view, the cryptocurrency’s current rally appears less convincing than gold’s rise: “Gold carries the key macro signal of the week: it has risen steadily as the Treasury doubled the volume of its bond buybacks—and without any forced buying that inflated Bitcoin’s price,” — McCarthy said. “If you want to understand where investors are actually hedging against currency and inflation risks this week—it’s gold, not Bitcoin,” he asserted.

Meanwhile, according to Bloomberg, institutional investors have returned to the cryptocurrency market this week: U.S.-traded spot Bitcoin ETFs may see their largest weekly inflow since January, the agency reports. Since the start of the week, 13 such ETFs have attracted more than $1 billion, fueling bullish sentiment in the crypto market.

“For the first time this year, there is a risk that my year-end target [for Bitcoin] ($100,000) may turn out to be too low,” — wrote Jeffrey Kendrick, head of digital asset research at Standard Chartered, in a note to clients.

Despite the rally of the past few days, Bitcoin is still trading about 40% below its all-time high of $126,000, reached last October. However, the cryptocurrency has already risen by more than 30% from its most recent local low of $58,642 in late June.

“We’re not experts in macroeconomics, but we know that Bitcoin has historically responded positively to increased liquidity. And the current apathy toward Bitcoin and the cryptocurrency markets has been driven by a combination of tightening market conditions following the conflict with Iran, rising inflation risks, and very strong trading in AI/semiconductors, which has siphoned off all liquidity,” according to a note from Bernstein’s analyst team. As hyperscalers continue to seek funding for their ambitious AI projects and borrow more aggressively in the debt markets, investors may turn to defensive “hard” assets as a hedge—including Bitcoin, the analysts added. Bitcoin may be a form of digital money, but its code guarantees a fixed supply, which eliminates the risk of devaluation, Bernstein noted.

"The question is no longer how much Bitcoin might fall, but whether [the] correction has wiped out roughly 50% of the excess accumulated during the previous rally, and whether historical models of ‘bear’ markets still apply to a market where regulation and ownership structures are changing,” MarketWatch quotes Dovilė Silenškienė, head of digital asset research at WisdomTree. Given that Bitcoin has repeatedly experienced peak-to-trough declines that lasted longer than traditional markets can withstand, she cautions against jumping to the conclusion that Bitcoin has already bottomed out.

“Macroeconomic conditions, liquidity, and market participants’ positioning may outweigh fundamental factors, and Bitcoin could very well fall well below current levels,” Silenksite warned, noting, however, that such movements “would not negate the merits of investing [in Bitcoin] over the longer term.”

This article was AI-translated and verified by a human editor