Bitcoin is trading above $78,000 on Monday, up roughly 2% over the past 24 hours, extending last week's 20% surge—its strongest weekly performance in over two years. The cryptocurrency touched an intraday high near $79,460 before easing into consolidation, with bulls now targeting the psychological $80,000 level.
Liquidity boost from Treasury purchases
The rally has been fueled by improving liquidity expectations after US Treasury Secretary Scott Bessent announced plans to increase purchases of longer-dated government debt. This move helped lower long-term bond yields, improving appetite for risk assets and raising hopes that financial conditions could become more supportive.
Meanwhile, US government debt surpassing $40 trillion has renewed concerns about the country's fiscal outlook, reviving interest in the so-called currency debasement trade. This favors scarce assets like Bitcoin and gold as potential stores of value.
ETF inflows and regulatory clarity
Institutional demand has been evident in exchange-traded fund flows. US spot Bitcoin ETFs recorded $1.92 billion in net inflows last week, their strongest weekly total since early October. This, combined with short covering, amplified Bitcoin's upward move as traders betting on lower prices were forced to close positions.
The regulatory backdrop also improved after President Donald Trump renewed his push for clearer digital asset rules. Greater regulatory clarity could reduce perceived risk and make it easier for traditional financial institutions to increase exposure.
Key economic events this week
US core Personal Consumption Expenditures (PCE) inflation data, scheduled for Wednesday, is one of Bitcoin's main macroeconomic tests this week. Core PCE is the Federal Reserve's preferred inflation measure, and economists expect its annual rate to remain at 3.3%. Markets currently assign a 65% probability that the Fed will keep interest rates unchanged in September.
A cooler-than-expected inflation reading could lower bond yields and weaken the US dollar, creating a supportive environment for Bitcoin. Conversely, a stronger report could encourage expectations that rates will remain higher for longer, pressuring risk assets.
Additionally, Federal Reserve Chair Kevin Warsh's speech at Jackson Hole on Friday could be the week's most significant catalyst. Warsh has provided limited guidance on monetary policy since taking office in May, leaving investors uncertain about the Fed's next move. Even a modest change in his language on inflation, rates, or growth could affect Treasury yields, the dollar, and risk assets.
Technical outlook
The BTC/USD 4-hour chart remains bullish after Bitcoin broke above its 50-day Exponential Moving Average and a falling trendline before clearing the 200-day EMA. The Relative Strength Index is in overbought territory, indicating strong but stretched momentum, which could lead to consolidation or a mild pullback before another attempt at $80,000.
Immediate upside target is $80,000. A clear break above that barrier would place the previous high near $82,800 in focus. Clearing that level would confirm a stronger technical breakout and could open the path toward $90,000. Continued ETF inflows, softer inflation data, and a restrained Fed message would support this bullish scenario.
If Bitcoin extends its pullback, initial support sits near $73,400, corresponding with the 61.8% Fibonacci retracement level. The 200-day EMA near $71,600 provides the next major support, followed by the psychological $70,000 level.
For broader market context, Ethereum also saw a sharp rally on similar dynamics, while Solana surged 27% on ETF inflows and governance votes. Meanwhile, earnings resilience has countered Treasury yield surges, and miners have rallied on gold and silver strength.
This article is for informational purposes only and does not constitute financial advice.
