- Bitcoin surged 22% over the past week to trade around $77,800, driven by a combination of macro factors and a short squeeze.
- Analysts point to the Jackson Hole symposium as the next key test, with markets focused on Fed Chair Kevin Warsh’s Friday keynote speech.
- The rally was fueled by a weak dollar, heavy spot ETF buying, and the liquidation of over $2.75 billion in Bitcoin shorts alone.
Bitcoin traded around $77,800 on Monday, up 22% over the past seven days, according to CoinGecko data, with analysts looking to this week’s Jackson Hole meeting as its next test. The symposium runs from Thursday to Saturday, but markets are focused on Friday morning, when Kevin Warsh delivers his first keynote as Fed chair.
Warsh took office in May, succeeding Jerome Powell, and has made changing how the Fed communicates a priority. Friday will be the market’s first read of how he handles the format, ahead of the Fed’s September 16 rate decision, where CME’s FedWatch tool puts the chance of a hike at 38.4%.
The rally had several catalysts at once, including U.S. Treasury Secretary Scott Bessent announcing a doubling of long-dated bond buybacks, which dragged yields lower and weakened the dollar. Spot Bitcoin ETFs saw heavy buying return, and exchange balances fell to multi-year lows with more than 80% of supply held by long-term holders, according to Algoz’s Stephen Wundke.
As spot buying pushed through $65,000 and then $70,000, short positions were closed out at scale. Bitget Wallet’s Lacie Zhang put the total at more than $4 billion of crypto shorts over two to three days, with Bitcoin shorts alone around $2.75 billion during the initial squeeze.
CoinShares’ head of research James Butterfill called it “a macro story, not a crypto one,” writing that softer inflation and weaker payrolls have undermined the case for tightening. He expects the market to hold its range, with $80,000 “an important upper boundary.”
HashKey’s Tim Sun told Decrypt that a thoroughly deleveraged market, a weaker dollar, and returning ETF flows suggest the market “seems to be forming a consensus around the bottom range.” He also put “clear resistance” near $80,000, adding that clearing it would need “new incremental capital and more definitive macroeconomic catalysts.”
Wundke told Decrypt that the week’s movement represented “a textbook demonstration of supply illiquidity meeting a sudden demand shock.” He said the next major obstacle is $82,000, and that Bitcoin now “looks like any sell offs in price will be treated as buying opportunities from here on.”
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