20.08.202607:50 Forex Analysis & Reviews: Brief Overview: Record Rally in Bitcoin: Trump's Political Impulse and U.S. Treasury Intervention

In mid-August 2026, the cryptocurrency market demonstrated its strongest daily gain since February. Bitcoin (BTC) prices surged by more than 8%, reaching a temporary high of $69,757 (the highest since June 1) before consolidating in the $69,000–$69,500 range. Following the first cryptocurrency, altcoins also exhibited sharp upward movements: Ethereum (ETH) skyrocketed nearly 20%, confidently surpassing the $2,280 mark; XRP gained 12% (to $1.12); Solana rose by 12.4%; and the $TRUMP token appreciated by 20.2%. This rapid surge triggered a massive short squeeze: according to CoinGlass, in one day, 110,000 traders faced liquidations totaling over $1.45 billion, with $1.29 billion related to short positions (including a simultaneous buyback of shorts worth $700 million in just one minute).

The main catalyst for the rally was political and regulatory news from Washington. President Donald Trump held a meeting at the White House with SEC Chief Paul Atkins, CFTC Chairman Mike Seliger, and top executives from leading crypto companies (including Robinhood and Kraken) ahead of the CFTC Advisory Committee on Innovation meeting. Trump stated his goal of securing the U.S. status as a world leader in the crypto industry and urged Congress to pass the Digital Asset Market Clarity Act (CLARITY Act). This was preceded by the SEC's initiative to implement "Regulation Crypto Assets," offering exceptions from securities registration for capital raises of up to $5 million over four years and $75 million over 12 months.

The market also received strong support from the U.S. Treasury's decision to double the volume of its buyback operations for long-term Treasury bonds (with maturities of 10 to 30 years) from $2 billion to at least $4 billion per operation from September 9 to November 4. This led to a sharp decline in the yields of 30-year bonds from a 19-year peak of 5.34% to 5.19%, and of 10-year bonds to 4.64%. The market interpreted the decrease in yields on risk-free securities as a form of quantitative easing (QE), which restored risk appetite and spurred a $1 billion inflow into spot Bitcoin ETFs in the early weeks of August.

Key Factors of Pressure

Despite the strong short-term optimism, the cryptocurrency market continues to be affected by significant headwinds:

1. Fiscal Imbalance and Rising U.S. National Debt: The national debt of the U.S. is approaching $40 trillion. The Treasury's bond buyback program is aimed solely at supporting liquidity in the debt market, not at reducing the debt burden. It does not expand the Federal Reserve's balance sheet, leaving fundamental issues of budget deficits unresolved.
2. Inflationary Pressure and Geopolitics: The military conflict with Iran keeps energy prices elevated, fueling overall inflation in the U.S. This restricts the Fed's options and diminishes the chances of a swift shift to accommodative monetary policy.
3. Ongoing Competition from Bond Yields: Despite a local drop in Treasury yields, rates above 4.6–5.2% remain attractive to conservative institutional investors, limiting long-term inflows of institutional liquidity into digital assets.
4. Legislative Pause in Congress: The key CLARITY Act has not passed yet, and the SEC's new rules on "Regulation Crypto Assets" remain in draft form, maintaining regulatory uncertainty for significant institutional capital.
5. Technical Pressure and Seller Overhang: A significant portion of the current growth is attributable to a mechanical liquidation of $1.45 billion in shorts. After a 40% drop from last year's peak of $115,000, there remains substantial positional volume in the market, with investors ready to secure a breakeven at every strong rebound.

Forecast

Based on the comparison of regulatory drivers and macroeconomic risks, the forecast for Bitcoin's dynamics is as follows:

In the short term (August-September 2026), after the liquidation of short positions, the market will transition to cooling and consolidation. A technical pullback to the $64,000–66,000 range is likely to alleviate local overbought conditions. The start of extended bond buybacks by the Treasury starting September 9 will create a stable liquidity cushion, preventing deep declines.

In the medium term, the $58,000 level, set in early summer, confirms the status of a cyclical bottom in the correction. The inflow of capital into spot ETFs and regulatory actions from the White House create a foundation for a moderate upward trend in the range of $68,000–$78,000 by the end of autumn. However, achieving the psychological level of $100,000 and returning to historical highs will require final approval of the CLARITY Act by Congress and stabilization of the geopolitical situation in the Middle East.