Bitcoin logs strongest August since 2017, up 25% on ETF inflows

Bitcoin closed August up more than 25 percent to roughly $78,400 as of Aug. 31, its strongest monthly performance since 2017, breaking a nine-year seasonal weakness pattern. The price started the month around $62,000, briefly crossed $81,000, then settled in the $78,000-$79,000 range by month-end.

U.S. spot Bitcoin ETFs recorded net inflows of approximately $1.92 billion during the week the rally gained momentum, the strongest weekly inflow since October 2025, according to SoSoValue data. Monthly cumulative inflows through Aug. 28 reached roughly $3.3 billion.

On-chain data from Santiment shows large holders accumulated an additional 39,154 BTC over the past week, worth approximately $3 billion at current prices. Total whale holdings now approach 5.22 million BTC. Retail investors moved to lock in profits, with addresses holding between 0.1 and 1 BTC posting a cumulative score of -0.982, indicating a clear selling bias.

Bitcoin broke above its 200-day moving average at approximately $69,000 during the rally. Roughly $2.75 billion in short positions were liquidated in a single day, accelerating the price surge. Across the broader crypto market, approximately $9.71 billion in liquidations occurred over two weeks, with shorts accounting for $6.55 billion, per CoinGlass data.

The $78,250-$78,350 zone is the key resistance area. A breakout could open the path to $79,000, $80,000, and potentially $81,000. A drop below $77,200 risks further downside toward the $76,000-$77,000 range, with $75,700 cited as critical support. The RSI at 72 sits above the overbought threshold of 70, while the stochastic %K reads 82, hinting at a possible reversal.

Treasury buybacks and Fed hawkishness shape the macro backdrop

The U.S. Treasury announced on Aug. 19 it will at least double its long-end liquidity-support buybacks, with maximum purchases rising from $2 billion to at least $4 billion per operation. The expanded program covers Treasury securities in the 10-to-20-year and 20-to-30-year sectors, with operations scheduled from Sept. 9 through Nov. 4. BTC and gold rose as bond yields initially declined and the dollar weakened.

That backdrop has since become less supportive. Federal Reserve Chair Kevin Warsh delivered hawkish remarks at Jackson Hole, prompting markets to raise expectations for a September interest-rate increase. Higher rates can strengthen the dollar and increase the opportunity cost of holding assets without yield.

Q4 outlook hinges on $80,000 reclaim and macro events

Trader Carl Moon said buyers need to push Bitcoin back above $80,000, warning that failure to reclaim the level could expose the market to a deeper pullback. Miles Deutscher said the recovery did not resemble a typical "dead cat bounce," citing Bitcoin's relationship with gold and increased on-chain activity, though he questioned whether sufficient external capital was entering the market.

Fidelity's Jurrien Timmer said BTC had held the floor of his power-law model and may have satisfied the time component of its four-year correction. The model is an analytical framework, not a guaranteed price signal.

Even after the rally, Bitcoin remains roughly 30 percent below its level at the start of the year. The gap from last year's record high also remains wide, prompting caution among some observers who argue it is too early to conclude the recent uptrend marks a genuine trend reversal.

The next tests include the Sept. 4 U.S. employment report, Treasury buybacks beginning Sept. 9, and the Federal Reserve's September decision. Sustained ETF inflows and a confirmed break above $80,000 would provide stronger evidence that August's rally can continue into Q4.

This article is for informational purposes only and does not constitute investment advice.