Bitcoin has reclaimed the $80,000 mark for the first time since May, extending one of its sharpest rallies this year and reigniting buying across the broader crypto market. The world’s largest cryptocurrency is up about 28% in August, its strongest monthly performance since November 2024, fuelled by strong ETF inflows, a weaker US dollar, easing liquidity conditions and renewed optimism around US crypto regulation.
Bitcoin touched an intraday high of $80,995.43 before easing to $79,847.60, up 3.66% at the time of reporting. It has gained more than 23% over the past week, taking its market capitalisation to about $1.62 trillion.
The gains have spread across major crypto assets. Ethereum has risen 29.54% over the past week, taking its market capitalisation to about $394.6 billion. Cardano and Solana also gained up to 30% over the week, with market capitalisations of $8.3 billion and $59.2 billion, respectively.
The rally this week was fuelled by renewed optimism over US crypto regulation after President Donald Trump hosted cryptocurrency and prediction-market executives at the White House last week and urged lawmakers to pass a “fair version” of the Clarity Act. Trump described the legislation as “very, very powerful structured legislation”, saying it could help the US maintain its lead over China in digital assets.
The Clarity Act, which has cleared the US House of Representatives but remains stalled in the Senate, seeks to establish a regulatory framework for digital assets and provide greater clarity on the respective roles of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
ETF inflows provide key support
According to industry experts, institutional demand has been a key driver for sustained rally in the crypto market. U.S. spot Bitcoin ETFs recorded $337.56 million in net inflows on August 24, their seventh consecutive day of inflows. Weekly inflows have topped $2.5 billion, while ETF assets have risen to $98.56 billion from $78.67 billion a week earlier.
Vikaas M Sachdeva, CEO of BitDelta India, said the move above $80,000 reflects a combination of ETF-driven demand, improving liquidity and renewed regulatory attention, rather than a fundamental shift in Bitcoin’s long-term trajectory. US spot Bitcoin ETFs recorded nearly $2 billion in weekly inflows, their strongest in 10 months, while short covering added momentum.
“The key test is whether ETF demand holds beyond this initial recovery,” Sachdeva said, adding that inflation data and Federal Reserve policy expectations will be important near-term triggers. He cautioned that the sharp gains could invite consolidation or profit-taking, with sustained buying by large holders ultimately more important than a single strong week of inflows.
Short squeeze adds fuel to the rally
SB Seker, Head of APAC at Binance, attributed the initial rally to macro movements, easing bond yields and a short squeeze. He described the move as a healthy bounce after a difficult first half, while pointing to regulatory clarity, stronger ETF infrastructure and a maturing market as longer-term positives.
Ryan Lee, Chief Analyst at Bitget Research, said the rally reflects a combination of short covering and genuine demand. More than $200 million in short liquidations helped fuel the initial surge after Bitcoin broke out of the $62,000-$67,000 range, while spot Bitcoin ETFs attracted roughly $1.9 billion last week.
The next test, Lee said, is whether ETF and spot buying continues after the squeeze fades. A sustained hold above $80,000-$83,000, followed by consolidation in the $75,000-$83,000 range, could support further gains. Failure to hold the breakout could bring $75,000-$76,000 into focus.
Dollar weakness, policy optimism add to tailwinds
Ashish Singhal, Co-Founder of CoinSwitch, also said short covering amplified the move, but strong underlying demand makes the rally difficult to characterise as purely positioning-driven. Bitcoin has risen roughly 38% from its June lows, while spot Bitcoin ETFs attracted around $1.9 billion last week, their strongest weekly inflow of 2026.
“The important test now is whether this ETF demand persists after the short positions have been cleared,” Singhal said. Sustained inflows, he added, would provide a stronger basis for calling the move the beginning of a sustained uptrend.
The macro backdrop has also turned more supportive. A weaker US dollar and concerns over US fiscal sustainability are strengthening Bitcoin’s appeal as a scarce asset. Singhal pointed to the US Treasury’s decision to increase long-dated bond buybacks, which has eased pressure in the bond market and contributed to dollar weakness.
Renewed momentum around the CLARITY Act is providing another tailwind. Raj Karkara, COO of ZebPay, said the combination of institutional flows, improving liquidity, dollar sentiment and progress towards clearer crypto rules has created a more supportive backdrop for Bitcoin.
Institutional flows spill into Ether
The rally is also broadening into other major tokens. US spot Ether ETFs attracted around $697 million last week, while Solana and XRP also gained. Bitcoin and Ether ETFs together drew about $2.6 billion in a single week, although Bitcoin continues to capture the bulk of institutional flows.
Prateek Gupta, Head of Business at Mudrex, said reduced liquidations, strong ETF inflows and whale accumulation of more than 43,000 BTC over the past 60 days suggest that the rally is increasingly backed by genuine demand. The key, he said, is whether institutional and spot buying persists after the leverage-driven phase fades.
Can Bitcoin sustain the breakout?
For now, analysts remain cautious about declaring a new bull cycle. The $80,000 breakout will need sustained ETF inflows, institutional accumulation and support above $80,000-$83,000 to gain conviction. Otherwise, profit-taking could pull Bitcoin back towards $75,000-$76,000.
The bigger shift, however, may be in investor participation. John O’Loghlen, Managing Director, APAC, at Coinbase, said the growing involvement of long-term institutional capital, coupled with improving regulatory clarity and greater confidence in digital assets, points to a maturing crypto market.
“This reflects a broader trend of digital assets becoming more integrated into mainstream financial markets,” he said, adding that crypto adoption continues to broaden, institutional trust is deepening, and digital assets are becoming an increasingly established part of the global financial ecosystem.