#BTC回调至79000美元 Bitcoin plunges after breaking above $81,000, surging 23% this week as $3 billion in shorts are liquidated; tonight’s PCE data could trigger another round of massive volatility

Over the past week, the crypto market staged a textbook short squeeze. Bitcoin soared from around $63,000, briefly breaking above the $81,000 mark yesterday and reaching the milestone of rising above $80k for the first time since mid-May. Ethereum surged approximately 30% over the same period, climbing above $2,500. However, just as bulls were celebrating, Bitcoin retreated to around $79k after its spike—having gained and then lost the $80k level, the latest battle between bulls and bears has only just begun. As of August 26, 2026, Bitcoin (BTC) was trading at $78,931, up a marginal 0.23% over 24 hours; Ethereum (ETH) was trading at $2,463, down a marginal 0.30% over 24 hours.

I. Market Overview: 23% Weekly Surge, Ethereum Soars 30%
On August 26, the cryptocurrency market entered a period of high-level volatility and consolidation after experiencing a historic rally. Bitcoin broke decisively higher from around $63,000-$64,000 this week, punching through multiple resistance levels in succession and briefly reaching $81,237 yesterday, marking its first break above $80k since mid-May. As of press time, BTC was fluctuating at around $78,931, up a marginal 0.23% over 24 hours. Bitcoin has gained approximately 24% over the past week, approaching $79,000 and recording its best performance since 2023. Bitcoin’s market cap is approximately $1.57 trillion, with its market dominance rising to 59.68%. Ethereum’s performance was even more dramatic. ETH rose approximately 30% over the same period, climbing above $2,500. As of press time, ETH was trading at around $2,463, down a marginal 0.30% over 24 hours. Ethereum’s market cap is approximately $293 billion, with a market dominance of 11.20%. Altcoin performance was mixed. The Total3 index, excluding Bitcoin and Ethereum, retreated after rising sharply in early trading and posted a decline for the week. Solana rose 1.46%, while Hyperliquid surged 4.95%; XRP fell 0.52%, BNB fell 0.62%, and Dogecoin fell 1.11%. The CoinMarketCap Altcoin Season Index stood at 46, far below the 75 threshold defining altcoin season, showing that most altcoins have underperformed Bitcoin over the past 90 days. Total cryptocurrency market capitalization recovered to $2.65 trillion.
The Fear and Greed Index has surged to 81-83, jumping directly from the “fear” range a month ago into the “extreme greed” range. In terms of liquidations, short positions worth more than $3 billion were liquidated across the crypto market over the past week. BitWallet research analysts estimate that more than $4 billion in crypto shorts were liquidated within two to three days. Over the past 24 hours, leveraged liquidations totaled $461 million, with short liquidations accounting for 66.10%. Shorts accounted for 73% of Bitcoin liquidations, showing that bears remain under sustained pressure.

II. Drivers of the Rally: Three Positive Catalysts Explode Simultaneously
This rally was not accidental, but rather the result of three positive catalysts resonating within a single week.
Driver One: U.S. Treasury Expands Treasury Buybacks, “Dollar Debasement Trade” Heats Up On August 19, the U.S. Treasury announced that it would raise the maximum size of liquidity-support buyback operations targeting long-term Treasuries from $2 billion per operation to “no less than $4 billion,” effective September 9. Although the $4 billion buyback size itself is not large, the market is trading on the policy signal it sends—the U.S. public debt has surpassed $40 trillion, while the 30-year Treasury yield briefly rose to its highest level since 2007. Investors expect the U.S. government may continue easing pressure on long-term yields through measures such as bond buybacks and adjustments to debt issuance maturities. After the announcement, long-term Treasury yields briefly fell, the dollar weakened, and gold and Bitcoin rose simultaneously. The “dollar debasement trade” heated up again, with funds flowing into Bitcoin to hedge against inflation and currency depreciation. The dollar fell nearly 1% for the week, gold broke above $4,600, and Bitcoin rose more than 25% in a single week.
Driver Two: Largest Short Squeeze in History, $3 Billion in Shorts Wiped Out
Another core driver of this rally was the largest short squeeze in history. A large number of shorts established bearish positions in the $63,000-$65,000 range. Once the price broke above $70,000, these shorts were forced to close and cover in concentration, further driving prices higher. Over the past week, Bitcoin shorts alone lost approximately $3 billion. Analysts point out that a short squeeze can initiate a rebound, but this mechanism alone is unlikely to sustain an uptrend. The key difference in this rebound is that spot demand and ETF flows have also improved simultaneously, meaning the rebound may be more sustainable.
Driver Three: New SEC Crypto Regulations + ETFs Attract $2.6 Billion in a Single Week
Major positive news also came from the regulatory front. On August 18, the SEC formally proposed a draft of the “Crypto Asset Regulation” rules, opening a compliant channel for digital-asset financing. Expectations of an increasingly clear regulatory environment continue to build. Institutional funds are flowing back at an unprecedented pace. U.S. spot Bitcoin ETFs attracted $1.92 billion in net inflows last week, the largest weekly inflow since Bitcoin reached its cycle peak last October. Bitcoin and Ethereum ETFs have recorded net inflows for six consecutive trading days, with combined inflows of $453 million on Monday alone, including $338 million into Bitcoin ETFs and $116 million into Ethereum ETFs. Cumulative net inflows into Bitcoin ETFs have reached $2.26 billion.

III. Signs of an Overheated Market: Extreme Greed and a Pullback From the High
Despite the strength of the rebound, several signs of overheating have emerged. The Fear and Greed Index surged to 83, jumping directly from the “fear” range a month ago into the “extreme greed” range. This reading means market sentiment has become extremely euphoric, historically often accompanying the risk of a short-term correction. Bitcoin pulled back from its high. After briefly breaking above $81,237 yesterday, the price fell to $79,024. The $80k level was gained and lost again, reflecting significant profit-taking pressure at that level. Altcoins are clearly lagging. Bitcoin dominance briefly rose to approximately 61% this week before falling back to around 59%, near its high for the year. The Altcoin Season Index stood at just 46, far below the threshold of 75, indicating that capital has not spread to the broader market. Derivatives trading volume contracted. Crypto derivatives’ 24-hour trading volume fell 13.11% from the previous day, with fewer short-term directional bets and a growing wait-and-see atmosphere.

IV. Technical Analysis: $80k Becomes the Bull-Bear Divide
Bitcoin: Repeated Battle Around $80k BTC broke decisively out of the converging trendline structure at $63,000, briefly reaching $81,237 before retreating to around $79,000. The technical picture has improved significantly—Bitcoin has moved back above its 200-day moving average, while spot ETF inflows have approached $2 billion.
Key support: $78,000-$78,900: Current price zone; holding it would preserve the bullish structure $76,000-$77,000: Recent pullback confirmation zone $74,000-$75,000: Stronger support zone Key resistance: $80,000: Psychological round-number level, gained and lost yesterday $81,237-$81,300: Yesterday’s high zone $82k-$83,000: Key resistance zone identified by CryptoQuant CryptoQuant analysts said Bitcoin has emerged from the bear market and entered the early stage of a bull market. However, spot demand, ETF flows, and momentum have turned positive and bullish, while elevated profit-taking, exchange inflows, and overbought conditions suggest a possible short-term cooldown. A sustained break above $80,000 could open the way toward $82,000-$87k.
Ethereum: $2,500 Becomes the New Battleground ETH briefly climbed above $2,500 before retreating to around $2,463 for consolidation. Key support: $2,400-$2,450** (short-term support zone),** $2,300 (deeper support)
Key resistance: $2,500** (psychological level),** $2,550 (weekly high)

V. Biggest Suspense Tonight: PCE Data Could Trigger Another Round of Massive Volatility Tonight, the United States will release July PCE inflation data—the Federal Reserve’s preferred inflation gauge and the market’s biggest current source of uncertainty. In addition, the Jackson Hole central bank symposium will be held from August 27 to 29, and Fed Chair Waller’s speech will become a key variable determining the dollar’s direction and risk-asset valuations.
The market is closely watching whether Waller can clearly explain the inflation outlook and policy responses under different economic scenarios. If Waller fails to provide clear guidance, the 30-year Treasury yield could surge to 5.5% or higher, while the dollar could face another round of downward pressure.
Meanwhile, the Senate has postponed the vote on the Clarity Act until mid-September and will prioritize the bill after lawmakers return from recess. The SEC and CFTC are separately advancing independent rulemaking processes and do not need to wait for the Clarity Act to pass.

VI. Trading Recommendations: Stay Clear-Headed Amid Extreme Greed
Short-term traders
The Fear and Greed Index has surged to 83 (extreme greed), with clear signs of short-term market overheating and significant risks to chasing the rally.
BTC strategy: Watch the $78,000-$79,000 support and $80,000-$81,000 resistance. If the PCE data is favorable and the price breaks above $80,000 on strong volume, consider entering with a small position; if it is rejected and retreats near $81,000, beware of profit-taking pressure. A stop-loss is recommended below $77,000.
ETH strategy: Watch the $2,400-$2,450 support. Continue holding if it holds; pay attention to risk if it breaks below.
Medium- and long-term investors
The U.S. Treasury’s expanded Treasury buybacks, six consecutive days of ETF inflows, and progress on new SEC regulations—three signals are converging. CryptoQuant analysts said Bitcoin has emerged from the bear market and entered the early stage of a bull market. The $75,000-$77,000 zone still offers allocation value from a long-term perspective. However, the extreme greed reading and uncertainty surrounding tonight’s PCE data suggest that short-term volatility could intensify. It is recommended to wait until the PCE data and the Jackson Hole symposium results become clear before reassessing allocation opportunities.$BTC ‌