In the White House meeting room last Wednesday, a row of exchange and brokerage executives sat there while the president urged the Senate to pass the CLARITY Act as quickly as possible. Pushing the timeline forward by a day, the SEC had already posted a set of rules for issuing crypto assets. The committee approved them unanimously, with not a single dissenting vote. The market put these two developments into the same pocket, and the label on the outside read: regulatory tailwind.
Once that label was attached, that week’s weekly chart printed its biggest bullish candle since March 2023. On a weekly basis, Bitcoin closed up 23.58% this week; I personally cross-checked using Binance’s weekly K-line. Today the price is still hovering around the 770,000 level, with little pullback.
With a candle this large, it could be that someone is buying with real money, or it could be that the shorts are being carried out on the shoulders. On the K-line chart, these two things look identical. Only when you dig into the position data can you tell them apart.
First, look at the futures. On Binance, $BTC perpetual contracts had an open interest of 110,900 coins on August 17, and after a week’s rally it was 105,500 coins on August 24. In dollar terms, open interest did rise—it rose because the price rose. Over the whole week it moved up by more than 20%, but the coin-margined contract positions increased by not one coin; instead, they fell by more than 5,000 coins.
The funding rate also didn’t move. From August 22 to now, every eight-hour settlement has stayed at 0.0100%, exactly the benchmark level. In the three most intense days of the move, longs didn’t pay even a single cent of additional premium.
What jumped was the big-account long/short ratio. When price action kicked off on August 19, it was 1.43; today it’s 2.09. Big players only chased after the price had already stood up, and they didn’t really add positions during the rally. In the same period, CoinGlass data shows that the scale of short liquidations exceeded $4 billion.
Put the three sets of data together, and they point to the same action: shorts are closing, while longs are chasing higher.
But it’s also not right to write the entire week as a full-on short squeeze. The spot ETF side is bringing in real money. On August 20 alone, net inflows were $606 million—the biggest day since May 1. After that, net inflows continued for five straight days. That money has nothing to do with contract liquidations; it’s someone buying shares at the current price. A weekly gain of more than 20% can’t be sustained by just these few days of net inflows—it’s more like confirmation of the move than the engine.
Mark Cuban’s explanation is the most direct: he said the government manufactured a short squeeze that pushed the price up, and nothing else really changed. Mike McGlone of Bloomberg’s industry research also doesn’t accept this as a trend reversal; his wording was a bounce within a bear-market purge. On the opposing side, 21Shares points to an on-chain selling-pressure indicator, which has already fallen to the lowest range since 2010—there aren’t many people willing to sell at this price.
On the mechanism, I agree with Cuban: this week’s thrust really came from liquidation flows. On the conclusion, I don’t agree. The proposal filed on August 18 matters more than this week’s rally.
The SEC proposed two tiers of exemptions: one that allows projects to raise $5 million over four years, and another that relaxes it to $75 million within 12 months. The cost is additional disclosure and audited financial reports. The conditional safe harbor goes further. If the issuer can prove that the management work it promised has been completed and that it no longer takes on any new material management responsibilities, the token can exit the definition of an investment contract. The anti-fraud provisions keep applying. #crypto_regulation
The difference between this proposal and the CLARITY Act is that they run on two different clocks.
The SEC runs on an administrative clock. After the proposal is published in the Federal Register, there’s a 60-day comment period. After the comment period ends, the final vote is taken, and the whole process doesn’t require Senate approval. Also, this time it was approved through written voting by three Republican commissioners. After the last Democratic commissioner left office in January last year, there was nobody left in the commission to vote against.
CLARITY runs on a political clock. The House already voted on it in 2025, but the Senate dragged it until today. On August 8, the Majority Leader submitted a procedural motion; the vote is scheduled for September 15, with a 60-vote threshold. Even if all Republicans vote yes, it’s still not enough—you’d need to pull someone from the other side. The point where it gets stuck is that Democrats require the provisions on conflicts of interest and anti-illicit finance to be written in. Galaxy Research put the probability of this bill becoming law within the year at 50% at the end of July, then cut it to 30% in August.
Last week’s market action essentially bought both lines together. The vote in mid-September will split them apart.
A constraint breaking-news item that’s not commonly written about: Hester Peirce, who leads the SEC’s crypto task force, plans to leave in November this year to teach at university. Her term expired in June last year. Under the rules, she could have stayed until December this year, but she chose to leave early. The concept of the safe harbor was originally proposed by her. If the rules move from proposal to final form, it’s best to push them through while she’s still on the commission.
My assessment also has weaknesses. What’s on the table for now is still only a proposal. The comment period is where everyone comes in to amend the text. Both the industry and the consumer protection side will push their own opinions into it. How far the safe harbor needs the issuer to prove things—and what the final draft ends up saying—may differ a lot from the current wording. If it ends up being narrowed, this line has to be recalculated.
The Treasury’s long-term bond buyback round hasn’t finished either. The execution window is September 9 to November 4. The money hasn’t really been spent yet; the liquidity impact is still coming later. This is one factor that can support staying bullish. Also, the judgment I made using the funding rate has limited evidentiary strength. 0.0100% is Binance’s benchmark funding rate. Under a neutral market, it naturally would sit there; it can show that longs aren’t crowded, but it can’t tell you more.
In that week, $XRP rose by more than 50%, and $ETH also outperformed $BTC . The assets that are most sensitive to the regulatory lens ran out front. That suggests the market really is buying the line about rules—not just liquidity.
Next, you can look at how the market reacts on September 15. If the procedural vote doesn’t pass but the price holds, it means the market has already learned to treat that SEC line separately. If they send it back together, then what last week’s buyers bought would only be the Senate. You can also keep an eye on whether coin-margined positions and funding rates on the contract side have caught up. In a rally taken over by real money, these figures will move.
Once that label was attached, that week’s weekly chart printed its biggest bullish candle since March 2023. On a weekly basis, Bitcoin closed up 23.58% this week; I personally cross-checked using Binance’s weekly K-line. Today the price is still hovering around the 770,000 level, with little pullback.
With a candle this large, it could be that someone is buying with real money, or it could be that the shorts are being carried out on the shoulders. On the K-line chart, these two things look identical. Only when you dig into the position data can you tell them apart.
First, look at the futures. On Binance, $BTC perpetual contracts had an open interest of 110,900 coins on August 17, and after a week’s rally it was 105,500 coins on August 24. In dollar terms, open interest did rise—it rose because the price rose. Over the whole week it moved up by more than 20%, but the coin-margined contract positions increased by not one coin; instead, they fell by more than 5,000 coins.
The funding rate also didn’t move. From August 22 to now, every eight-hour settlement has stayed at 0.0100%, exactly the benchmark level. In the three most intense days of the move, longs didn’t pay even a single cent of additional premium.
What jumped was the big-account long/short ratio. When price action kicked off on August 19, it was 1.43; today it’s 2.09. Big players only chased after the price had already stood up, and they didn’t really add positions during the rally. In the same period, CoinGlass data shows that the scale of short liquidations exceeded $4 billion.
Put the three sets of data together, and they point to the same action: shorts are closing, while longs are chasing higher.
But it’s also not right to write the entire week as a full-on short squeeze. The spot ETF side is bringing in real money. On August 20 alone, net inflows were $606 million—the biggest day since May 1. After that, net inflows continued for five straight days. That money has nothing to do with contract liquidations; it’s someone buying shares at the current price. A weekly gain of more than 20% can’t be sustained by just these few days of net inflows—it’s more like confirmation of the move than the engine.
Mark Cuban’s explanation is the most direct: he said the government manufactured a short squeeze that pushed the price up, and nothing else really changed. Mike McGlone of Bloomberg’s industry research also doesn’t accept this as a trend reversal; his wording was a bounce within a bear-market purge. On the opposing side, 21Shares points to an on-chain selling-pressure indicator, which has already fallen to the lowest range since 2010—there aren’t many people willing to sell at this price.
On the mechanism, I agree with Cuban: this week’s thrust really came from liquidation flows. On the conclusion, I don’t agree. The proposal filed on August 18 matters more than this week’s rally.
The SEC proposed two tiers of exemptions: one that allows projects to raise $5 million over four years, and another that relaxes it to $75 million within 12 months. The cost is additional disclosure and audited financial reports. The conditional safe harbor goes further. If the issuer can prove that the management work it promised has been completed and that it no longer takes on any new material management responsibilities, the token can exit the definition of an investment contract. The anti-fraud provisions keep applying. #crypto_regulation
The difference between this proposal and the CLARITY Act is that they run on two different clocks.
The SEC runs on an administrative clock. After the proposal is published in the Federal Register, there’s a 60-day comment period. After the comment period ends, the final vote is taken, and the whole process doesn’t require Senate approval. Also, this time it was approved through written voting by three Republican commissioners. After the last Democratic commissioner left office in January last year, there was nobody left in the commission to vote against.
CLARITY runs on a political clock. The House already voted on it in 2025, but the Senate dragged it until today. On August 8, the Majority Leader submitted a procedural motion; the vote is scheduled for September 15, with a 60-vote threshold. Even if all Republicans vote yes, it’s still not enough—you’d need to pull someone from the other side. The point where it gets stuck is that Democrats require the provisions on conflicts of interest and anti-illicit finance to be written in. Galaxy Research put the probability of this bill becoming law within the year at 50% at the end of July, then cut it to 30% in August.
Last week’s market action essentially bought both lines together. The vote in mid-September will split them apart.
A constraint breaking-news item that’s not commonly written about: Hester Peirce, who leads the SEC’s crypto task force, plans to leave in November this year to teach at university. Her term expired in June last year. Under the rules, she could have stayed until December this year, but she chose to leave early. The concept of the safe harbor was originally proposed by her. If the rules move from proposal to final form, it’s best to push them through while she’s still on the commission.
My assessment also has weaknesses. What’s on the table for now is still only a proposal. The comment period is where everyone comes in to amend the text. Both the industry and the consumer protection side will push their own opinions into it. How far the safe harbor needs the issuer to prove things—and what the final draft ends up saying—may differ a lot from the current wording. If it ends up being narrowed, this line has to be recalculated.
The Treasury’s long-term bond buyback round hasn’t finished either. The execution window is September 9 to November 4. The money hasn’t really been spent yet; the liquidity impact is still coming later. This is one factor that can support staying bullish. Also, the judgment I made using the funding rate has limited evidentiary strength. 0.0100% is Binance’s benchmark funding rate. Under a neutral market, it naturally would sit there; it can show that longs aren’t crowded, but it can’t tell you more.
In that week, $XRP rose by more than 50%, and $ETH also outperformed $BTC . The assets that are most sensitive to the regulatory lens ran out front. That suggests the market really is buying the line about rules—not just liquidity.
Next, you can look at how the market reacts on September 15. If the procedural vote doesn’t pass but the price holds, it means the market has already learned to treat that SEC line separately. If they send it back together, then what last week’s buyers bought would only be the Senate. You can also keep an eye on whether coin-margined positions and funding rates on the contract side have caught up. In a rally taken over by real money, these figures will move.