🚀 Market overview: more than just a "green day"
• Leads Bitcoin (BTC) this surge: it has powerfully broken through the $75,000 US dollar barrier, recording a new high at $79,500. It has risen by more than 20% over the past three days from its lowest level at $64,100, and its weekly gains are heading toward setting a record since March 2023.
• Major cryptocurrencies are following suit: Ethereum (ETH) rose by more than 18% at one point; Ripple (XRP) posted particularly strong performance, with its daily gains surpassing 20% at one point; and Solana (SOL) briefly broke above the $90 level.
Market sentiment turned around: the Fear & Greed Index rose from 46 (Fear) to 72 (Greed), while total liquidation volumes surpassed $4 billion—of which $3.7 billion came from short positions—marking the strongest wave of pressure on short positions in recent years.
🔥 The "three engines" behind this sharp rise
This rally was the result of several positive factors:
1. Easing overall liquidity: The U.S. Treasury Department announced it will at least double the size of its long-term Treasury bond repurchase program (from $2 billion to $4 billion per repurchase operation), easing sell-offs in U.S. Treasury bonds, lowering their long-term yields, and boosting market risk appetite.
2. Clarifying regulatory expectations: Trump met with executives from the crypto sector at the White House and urged them to pass the Clarity Act for digital asset markets, sending a positive signal toward easing regulatory procedures.
3. Massive inflow of real money: U.S. Bitcoin exchange-traded funds saw net inflows exceeding $1 billion this week. In just August 19 alone, these funds recorded net inflows of $517 million, their highest level in three months. Moreover, large Bitcoin investors increased their Bitcoin holdings by about $2.75 billion over the past 60 days.
🤔 Bounce or reversal? Market divergence still persists
• The optimists: This is the start of a "new cycle." Some institutions are expressing strong confidence that the "digital asset cycle has hit its bottom," believing the market may enter a new cycle due to a double shift in policies and liquidity.
• Watch out: Beware of "phantom break-ins". Analysts believe the rise was driven primarily by short-covering pressure, and it needs genuine support from demand. If the price can’t hold above key levels (such as $69,000), the breakout could fail—or even retest the $53,000 level.
💎 Summary
There’s no doubt the market is going through a crucial transition phase. Strong gains and capital inflows point to a return of market confidence, but this surge also carries the risk of being overbought in the short term.
The start of a truly "new cycle" depends on the durability of inflows into ETF funds, applying regulatory benefits such as the Clarity Act, and the possibility that upward momentum from Bitcoin can extend to more alternative coins.
Market sentiment is high, but risks and opportunities coexist. Therefore, please stay rational and manage risk effectively.