Bitcoin's 24% weekly rally faces $70K test as yields rebound

Bitcoin rose 24% to $79,400 last week, its strongest weekly gain since March 2023, before easing to $77,800 as US bond yields rebounded.

Further gains depend on easing US bond yields, continued spot ETF demand, and progress on the CLARITY Act, analysts at crypto.news said, with the $70,000-$72,000 zone now acting as key structural support.

The US Treasury's decision to double buybacks of long-dated bonds pulled the 30-year yield off a 19-year high and triggered $3.3 billion in short liquidations on Wednesday, according to CoinGlass data. Spot Bitcoin ETFs pulled in $1.61 billion from Monday to Thursday, with $606 million arriving in a single day, while CryptoQuant's 30-day apparent spot demand recovered from minus 206,000 BTC on July 23 to roughly minus 5,000, on the cusp of turning positive for the first time since Feb. 26.

Bitcoin remains about 38 percent below its 2025 record above $126,000. The next test comes at the Jackson Hole Symposium from Aug. 27-29, where Fed Chair Kevin Warsh delivers his first speech. A break below $70,000 would signal the rally was mostly forced buying, while sustained buying above $82,000 could target $100,000-$130,000.

From Treasury Buybacks to $3.3B in Liquidations

The causal chain runs from macro policy to on-chain flows. The Treasury's buyback announcement lowered long-dated yields, strengthening risk appetite and forcing short sellers to cover. CoinGlass data shows $1.25 billion in positions liquidated over the past 24 hours, with shorts accounting for $1.06 billion of that total. The aggregated long-short accounts ratio for bitcoin sits at 0.865, meaning more accounts remain positioned short than long, leaving fuel for further squeeze pressure.

Open interest climbed 6.17 percent to $139.37 billion across the market, with BTC futures OI rising 7.38 percent to $57.7 billion, its highest since June. Predicted bitcoin funding rates sit at 0.013 percent, the highest point since January. However, BTC futures open interest declined to a two-month low of 715,000 BTC from 762,000 BTC on Aug. 18, showing the rally was driven by spot buying and short unwinding rather than fresh leverage.

Can Spot Demand Hold Above $70,000?

The key question is whether spot and institutional buyers can absorb supply once forced buying disappears. CryptoQuant data shows that when spot demand crosses from negative to positive, bitcoin has historically delivered a median 18 percent gain over the following 60 days with a 78 percent win rate. The figures rise to 23 percent and 87 percent when the cross fires with MVRV below its 365-day moving average, as it does now.

Bitcoin's move came alongside a rally in gold, with bullion near record highs as Treasury Secretary Bessent's debt management strategy weighed on long-dated yields. The Dollar Index sits at 98.77, down from its August highs. Ethereum rose 29.7 percent on the week to trade near $2,440-$2,500, while Solana gained 22 percent, showing the rally broadened beyond bitcoin.

The rally's sustainability hinges on whether spot demand holds once the short-covering impulse fades. If the $70,000-$72,000 zone holds as support through the Jackson Hole meeting, the setup favors a retest of $82,000 and potentially higher. A failure would confirm the move was largely positioning-driven, leaving bitcoin vulnerable to a retracement toward $55,000.

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