Bitcoin posted its largest weekly dollar increase in history, surging $14,775 from $62,818 to $77,593 between Aug. 17 and Aug. 23. This 23.5 percent move marked Bitcoin's best weekly percentage gain since March 2023, ranking 41st overall since 2010.
The rapid ascent triggered a significant short squeeze across crypto markets. Traders betting against Bitcoin were forced to cover their positions, liquidating approximately $2.7 billion in shorts. Galaxy Research identified this as Bitcoin's fastest bull flip in a year.
The Crypto Fear & Greed Index reached 74 on Aug. 25, its highest level since October 2025, signaling a sharp return to market optimism.
US spot Bitcoin ETF demand surged concurrently, recording their strongest inflow week since October 2025. This reverses months of sustained outflows that positioned these funds as net sellers throughout 2026. August is now on track to record the largest monthly net inflow for Bitcoin spot ETFs since Bitcoin's previous all-time high.
Despite the rebound, ETF holders remain underwater on their positions. Their average cost basis sits at $84,029, while Bitcoin's spot price traded at $78,955—a roughly six percent unrealized loss for the average ETF investor.
Two catalysts drove the rally. The US Treasury announced it would double its long-bond buyback operations, designed to ease pressure on Treasury yields. President Trump publicly urged Congress to pass the CLARITY Act, which proposes federal rules to classify digital assets as either securities regulated by the SEC or commodities regulated by the CFTC.
Bitcoin's spot price traded above $80,000 on Thursday, reflecting sustained upward momentum. The durability of this rebound hinges on whether ETF inflows continue into September and if the short squeeze proves lasting rather than temporary.
