Bitcoin cleared $81,000 this week, posting a weekly gain of roughly 23% and trading near $78,024 on August 30, up 0.6% over the past 24 hours. According to reports from CryptoQuant, Bitcoin's realized capitalization increased by more than $4.6 billion during the week ending August 30, representing the strongest short-term realized-cap movement since the current bear market began. This milestone triggered a broader rally across the cryptocurrency market, with three major meme coins posting significant gains. Dogecoin (DOGE) gained 34.22% last week, Pepe (PEPE) rose 59.53%, and Pump.fun (PUMP) delivered the strongest performance with a 95.84% weekly gain. The meme coin rally followed Bitcoin's breakthrough above the $80,000 resistance level, demonstrating the interconnected nature of the cryptocurrency market. U.S. spot Bitcoin ETFs recorded seven consecutive sessions of net inflows through August 25, attracting approximately $2.57 billion in total inflows, providing an independently measured source of spot-market demand.
Bitcoin's realized capitalization increase of $4.6 billion represents the strongest short-term realized-cap movement since the current bear market began, according to CryptoQuant contributor Darkfost. However, the 30-day average growth rate remained only 0.4%, leaving the developing liquidity shift unconfirmed overall. The realized-cap metric values each Bitcoin at the price recorded when it last moved onchain, differing from standard market capitalization that values the entire circulating supply at the latest market price. When older coins move at higher prices, realized cap generally increases, with analysts interpreting that change as capital entering the market because coins are transferring to buyers with higher cost bases. Darkfost noted that some investors who bought Bitcoin at higher prices may have capitulated during the recent downturn, creating new unspent transaction outputs with lower realized prices. Bitcoin recorded a historic weekly dollar increase of $14,775 during the week ending August 23, according to a Galaxy Research report, representing its largest weekly dollar gain on record, though short liquidations and momentum trading also contributed to the advance.
Bitcoin's rally from approximately $63,500 to above $80,000 received substantial support from spot buying rather than new leveraged positions, according to QCP Capital analysis on August 28. The trading firm estimated that U.S. spot Bitcoin exchange-traded funds attracted roughly $2.8 billion across eight consecutive sessions during the rally. Meanwhile, BTC-denominated futures open interest declined from about 646,000 BTC in mid-August to 588,000 BTC, indicating that traders closed futures positions on a net basis. Falling open interest means traders closed futures positions on a net basis, with some bearish traders likely buying Bitcoin or futures to cover short positions as prices rose. This combination suggests short covering and spot demand have played a larger role than fresh leveraged longs chasing the move, differing from a rally led by traders opening aggressive leveraged long positions.
The US Treasury doubled its long dated bond buyback operations on August 19, with the ceiling per operation rising from $2 billion to at least $4 billion, as reported by CoinDesk. This operational change triggered the largest liquidation cascade in the crypto derivatives market since October 2025, with $3.5 billion in crypto shorts liquidated within 72 hours of the announcement. The mechanism worked through direct yield compression, with the 30-year yield falling from 5.34% to 5.19% on August 19 alone, a drop of 15 basis points that compressed long-term interest rates and relaxed financial conditions. Bitcoin rallied 8.2% in under 12 hours on August 19, moving from an intraday low of $64,100 to a peak of $69,500, with $1.44 billion in short positions liquidated on that day alone. The derivatives squeeze created additional upward pressure, triggering $3 billion in additional shorts wiped out by August 20, bringing total liquidations to $3.5 billion between August 19 and 22.
The U.S. inflation backdrop remains less supportive, with Bureau of Economic Analysis data showing that headline personal consumption expenditures inflation reached 3.7% year over year in July, while core PCE, which excludes food and energy, remained at 3.3%. Both indexes rose 0.2% from June, with the annual figures remaining above the Federal Reserve's 2.5% objective. Federal Reserve Chair Kevin Warsh reinforced that concern during his August 28 Jackson Hole address, saying the Fed's "predominant focus right now should be on prices" and noting that broad financial conditions were difficult to describe as restrictive. Markets had assigned an estimated 35% probability to a 25-basis-point September rate increase before the speech, though this probability was a market estimate rather than a Federal Reserve forecast. The next policy decision will depend on incoming inflation, labor-market and activity data, with higher rate expectations potentially pressuring Bitcoin by strengthening the dollar and raising yields on lower-risk assets.
