Cryptocurrency prices have turned sharply higher, led by Bitcoin. The rally was triggered by news from the US Treasury Department, which sent both Treasury yields and the US dollar lower. The sudden shift in market conditions sparked one of the largest short squeezes in Bitcoin’s history, accelerating the move higher. Bitcoin also broke a historically important long-term trend line. The question now is whether this breakout marks the end of the bear market — or whether the rally is only temporary.
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Bitcoin’s price breaks a significant trend line
At the time of writing, Bitcoin’s price is around $69,700. At the time of the last market review, the price was $64,800, representing a rise of over 7 percent in two weeks. In practice, the entire rise occurred in a single day.
Let’s look at Bitcoin’s price using daily candles. We have been looking at Bitcoin using weekly candlesticks throughout the summer, as we haven’t seen any significant changes on a daily basis. Now the situation is different.
The blue trend line is the 50-day moving average, and the purple trend line is the 200-day moving average.
Bitcoin saw a significant price move yesterday. Bitcoin rose by a whopping 7.1 percent, the second-largest gain in a 10-month bear market. What makes this day significant is not the percentage gain but the day’s closing price.
As you can see from the chart above, Bitcoin ended yesterday above its 200-day moving average and closed the daily candle around $300 above it. This is a historic signal.
Bitcoin’s price did not close any daily candles above its 200-day moving average during the bear market in 2018 and 2022. When the price rose above this trendline, the bear market was over.
Bitcoin tested the 200-day moving average five times in May of this year, but each test failed. As a result, the price turned into a bearish trend for two months, eventually falling from around $82,000 to almost $57,000.
If you’re looking for a strong signal that a bear market is over, this is definitely one. It will be interesting to see whether Bitcoin’s price can find support at the 200-day moving average this week. If the price collapses back well below it in a couple of days, that would be a weak signal.
Why did the price of Bitcoin rise?
Bitcoin saw its biggest daily gain in over 6 months yesterday and its second-biggest gain during this bear market. What exactly caused this?
The reason is a chain of events that was triggered by the US Treasury Department’s announcement. The X post below provides a good explanation of what happened.
The Bessent Put
Today the US Treasury doubled the size of its long-end bond buybacks, the day after the 30-year yield hit a 19-year high at 5.33%. The extra dollars are small. The signal is enormous.
For the first time, the fiscal authority, not the Fed, stepped in to defend…
— Raoul Pal (@RaoulGMI) August 20, 2026
In short: the US Treasury Department announced that it would double its long-term bond purchase program. This caused a big move in long-term bond yields, which in turn caused the US dollar to fall.
A decline in the US dollar and interest rates is always a positive signal for stocks, precious metals, and crypto. The weaker the dollar and the lower interest rates, the more investors’ money moves from fixed-income investments to risk investments.
As the Bitcoin price rose rapidly, more and more short positions were liquidated. This started a snowball effect, or so-called short squeeze. When short positions are closed, traders must buy back the Bitcoins they sold from the open market. This drives the price up even further, which in turn liquidates new shorts.
This was probably one of the largest short squeezes in Bitcoin history in dollar terms. We don’t have complete historical data available, but yesterday was a significant day nonetheless.
I've checked with other sources too, this is actually the biggest $BTC 1D shorts liquidation event ever.
It cannot be understated how insane this is. https://t.co/vD7qkquTDd
— Byzantine General (@ByzGeneral) August 19, 2026
Short squeezes can cause incredibly fast price changes. The less liquidity there is in the market, the faster the price moves.
In addition, there was good news from the United States on Tuesday, when the SEC, which oversees the securities markets, announced a new regulatory package for crypto assets. President Trump also met with key figures of the crypto industry at the White House and naturally praised the industry’s growth potential,
This news likely fueled Bitcoin’s positive momentum even further.
BIP 110 failed: No changes to the Bitcoin blockchain
Next, let’s go back a little further in time.
This summer has seen a small-scale Bitcoin civil war that most crypto investors have missed entirely. The main reason the dispute did not make headlines outside the Bitcoin community is that it did not lead to a price collapse or changes to the Bitcoin blockchain.
This was the culmination of a dispute that had been ongoing for a couple of years over the Bitcoin spam problem. The topic has been around since 2023, when it became possible to easily add non-transactional data to the Bitcoin blockchain, such as images, videos, and NFTs.
This became possible unexpectedly due to the 2021 Taproot update. Taproot removed certain restrictions on Bitcoin blocks, allowing “spam” to be added to the blockchain.
The Bitcoin community has been arguing about whether only genuine transaction data should be accepted on the Bitcoin blockchain. The leading figure in the anti-spam community has been Bitcoin developer Luke Dashjr, whose Knots client provides a range of filters for node operators.
The anti-spam community eventually proposed a fix for Bitcoin: BIP-110. It was intended to be a year-long temporary solution. The situation culminated in early August, when Bitcoin miners had to signal whether they supported BIP-110.
BIP-110 activation would have required 55% of miners’ support. In the end, it only received a couple of percent in support and just a fraction of a percent in hashrate.
Miners who supported BIP-110 ultimately managed to mine only two blocks under the new rules. Since BIP-110 did not get enough hashrate, miners had a very difficult time finding new blocks, as this branch of the Bitcoin blockchain inherited the same difficulty level as the main branch.
BIP-110 was a catastrophic failure, and the anti-spam group never really gained any significant support from Bitcoin miners. This is how Michael Saylor commented on what happened on X.
Bitcoin worked exactly as designed. BIP-110 was free to fork, and the network was free not to follow. The result was decisive: about 99.85% of Bitcoin's hashpower stayed with Bitcoin. The BIP-110 branch mined only two blocks and is already more than 80 blocks behind.
— Michael Saylor (@saylor) August 9, 2026
The Bitcoin blockchain will continue to operate as before. Supporters of BIP-110 are now considering creating a completely new cryptocurrency, and the movement’s leader, Luke Dashjr, also lost his BIP editor rights after the event.
Hyperliquid’s price got a boost from Donald Trump’s comments
Next, let’s look at the altcoin market, which has seen positive price movements for the first time in ages. The reason is the sharp rise in Bitcoin’s price, which has also dragged other cryptocurrencies along. In the table below, you can see the development of the 15 largest altcoins over 24-hour, 7-day, and 30-day periods.
The list looks really green this time, with only a couple of exceptions. This week’s biggest winners are Ethereum and Hyperliquid.
Hyperliquid’s price has risen by more than 23 percent in 24 hours. The reason for the exceptionally strong rise is Donald Trump’s public comment. Trump hosted the biggest names in the crypto industry at the White House yesterday and mentioned Hyperliquid at a press conference.
🚨TRUMP SAYS CFTC WORKING TO BRING HYPERLIQUID INTO THE U.S.!
At a White House crypto event, President Trump said CFTC Chair Mike Selig is working to bring Hyperliquid into the United States in a fully compliant and legal fashion. pic.twitter.com/gPuAqpn8Xa
— Crypto Banter (@crypto_banter) August 19, 2026
Trump commented that CFTC Chairman Mike Selig is currently working to bring Hyperliquid to the United States. Hyperliquid is an exchange focused on perpetual futures trading, which is currently blocked for U.S. users.
Ethereum’s price rise may be due to the previously mentioned regulatory developments in the United States. The SEC, responsible for regulating securities markets, rolled out a new crypto regulatory package that was widely viewed positively. Ethereum is favored by institutional investors, so such news probably boosted their confidence in its continued growth.
However, it is important to understand the impact of the SEC’s action. The United States has been trying to pass the Clarity Act for a long time. It is still stuck in the Senate, and the passage of the law is very uncertain. The new regulatory framework proposed by the SEC is not a permanent law, meaning that a new administration could repeal it if it wanted to.
What does the big picture look like?
Finally, let’s look at the big picture of the crypto market. We have been commenting for months that the big picture has not changed. The ongoing bear market has followed a pattern similar to previous declines.
However, the situation has now changed. As we noted at the beginning of this review, the Bitcoin price made a historic breakthrough yesterday, closing the daily candle above the 200-day moving average. This has meant the beginning of a new bull market in previous bear markets.
Is the bear market, which has persisted for over 10 months, now coming to an end? It is still too early to draw this conclusion. The main reason is that yesterday’s price increase was an overreaction by the market to a single event that is not even related to crypto. It is very possible that the Bitcoin price will return to its starting point by the end of the week.
Although breaking the 200-day moving average has signaled something in the past, we will only talk about a few examples. The market structure was also completely different in 2014, 2018, and 2022 than it is today. So it is always worth being careful when drawing conclusions about Bitcoin’s previous bear markets. The data is very limited. The situation will change if we also receive additional positive signals supporting this development.
The price action in the coming days and week will say a lot about the future trend: will we see another big drop, or has a new bull market really started? We will be much wiser in this regard by the time of the next market review.
The situation also looks good on the weekly candles.
Bitcoin’s price rose back into the weekly consolidation channel. The weekly candle has not closed above $66,000 since May. If Bitcoin’s price were to remain within this channel by the end of the week and also remain above the 200-day moving average, it would be a very positive signal for the future.