Bears have been bloodwashed, and ETF funds have flowed back in large numbers, Bitcoin has risen about 23% this week, approaching 80,000 US dollars, and is expected to achieve the best weekly performance in more than three years

The Zhitong Finance App learned that Bitcoin continued its strong rebound this week. It once surged 9.4% during the intraday session on Friday, hitting a high of $79,500, and the cumulative increase this week increased to about 23%. If this increase continues until the end of the week, Bitcoin will record its best weekly performance since March 2023. At the same time, the reinflow of US spot Bitcoin ETF funds, the continued forced liquidation of bears, and favorable cryptocurrency policies released by the US government all contributed to a rapid recovery in market sentiment.

Bitcoin is currently only one step away from the $80,000 mark. The last time the digital currency was traded around $80,000 was in May of this year. However, despite the recent huge rebound, Bitcoin is still clearly below the all-time high of over $126,000 set in October last year. Bitcoin once fell to $58,642 at the end of June this year in a major adjustment since then.

The US Treasury Department's expansion of long-term bond repurchases has become an important catalyst for the market

An important turning point in this cryptocurrency rally came on Wednesday. US Treasury Secretary Vincent announced on the same day that the Treasury will at least double the scale of long-term US Treasury bond repurchases. After the news was announced, long-term US bond yields declined, market risk appetite improved rapidly, and risk assets, including Bitcoin, strengthened.

BTC Markets analyst Rachael Lucas said that the key factor that is really driving the current round of the market is that the US Treasury expands the scale of long-term treasury bond repurchases. Long-term returns have declined, which in turn has improved the risk appetite of the entire market.

Meanwhile, US President Trump met with a number of cryptocurrency industry executives at the White House on Wednesday, including the management of companies such as Coinbase (COIN.US) and Payward, to further strengthen market expectations that the Trump administration will support the digital asset industry.

Trump also urged the US Senate to pass the cryptocurrency market structure bill “Clarity Act.” The bill previously stalled in the Senate due to differences over the code of ethics provisions, and was unable to be voted on before the August recess.

$4.5 billion crypto bears were liquidated in three days, and Bitcoin is still being driven by “emptying”

Apart from improvements in the macro environment, the rapid rise in Bitcoin in this round still has obvious “emptying” characteristics.

According to Coinglass data, in the past three days, about 2.5 billion US dollars of leveraged short positions in the Bitcoin market were liquidated; the size of bearish leveraged positions liquidated in the entire cryptocurrency market reached about 4.5 billion US dollars.

As prices rose rapidly, short investors were forced to buy Bitcoin and close their positions. These passive purchases further boosted the price and triggered more short liquidations, creating a self-reinforcing upward process.

LO:Tech chief researcher Adam Morgan McCarthy believes that the bear squeeze is still an important force driving Bitcoin's rise.

Previously, the bearish positions of IBIT, a subsidiary of BlackRock, continued to increase against the world's largest spot Bitcoin ETF. According to S3 data, IBIT's short positions have continued to rise since this year. Currently, short positions account for about 3% of the fund's circulation share. IBIT currently has assets of approximately $55 billion.

However, McCarthy believes that compared to Bitcoin, gold may more accurately reflect investors' real hedging needs for currency and inflation risks. He pointed out that gold was also driven by the US Treasury's expansion of bond repurchases this week and rose to the highest level since May, but the rise in gold was not due to mechanical buying caused by large-scale bears being forced to close positions in the Bitcoin market.

ETF funds have returned this week, and the net inflow has exceeded 1 billion US dollars

Unlike the previous rise, which was mainly driven by bears to make up, this week the market began to show a more positive signal, and institutional capital is re-entering the Bitcoin market.

The 13 spot Bitcoin ETFs listed in the US have attracted more than 1 billion US dollars in net capital inflows so far this week, which is expected to be the largest weekly capital inflow since January this year.

This means that in addition to bears' recovery, new actual purchases are emerging in the market, providing more continuous financial support for Bitcoin's rebound.

Large Bitcoin holders have also re-increased their positions. According to CryptoQuant data, the so-called Bitcoin “giant whale” has increased its holdings of Bitcoin worth about 2.75 billion US dollars over the past 60 days, indicating that some large investors have ended their previous sell-off and switched back to buying.

Standard Chartered: $100,000 year-end target may even be too conservative

Bitcoin's strong rebound is also beginning to prompt Wall Street institutions to reassess future market space.

Geoffrey Kendrick, head of global digital asset research at Standard Chartered Bank, said that for the first time since this year, there is a risk that its Bitcoin target price of $100,000 by the end of the year may be “too low.”

Meanwhile, crypto-related US stocks continued to rise sharply on Friday. Coinbase, the largest digital asset trading platform in the US, rose 8.2%, Bitcoin holder Strategy (MSTR.US) rose 6.1%, and stablecoin issuer Circle (CRCL.US) rose 5.2%.

However, analysts still cautioned that much of the impetus in this round of growth comes from bear liquidation, so whether Bitcoin can continue to attract real additional capital after the short market is over will be the key to judging the sustainability of the rebound.

Overall, Bitcoin's rebound this week has gradually received more fundamental funding support from the initial bearish back-up. The decline in yield due to the expansion of long-term treasury bond repurchases by the US Treasury, the cryptocurrency policy support signal released by the Trump administration, the resurgence of net capital inflows of more than 1 billion US dollars in spot ETFs, and the increase in holdings of large holders have jointly pushed Bitcoin closer to 80,000 US dollars. However, after experiencing a rapid rise of about 23% in a week, the risk of market fluctuations also increased markedly. Whether it can actually break through and stabilize at 80,000 US dollars in the future will be an important hurdle for testing whether this round of rebound can continue further.