Bitcoin extended its rally above $76,000 on Friday, with the latest advance driven by a shift from short-covering to genuine spot and institutional demand. The move follows a sharp rebound that began after the U.S. Treasury expanded long-dated bond buybacks and Washington signaled a more crypto-friendly regulatory stance.
The initial surge was largely mechanical. Data from CoinGlass showed roughly $2.75 billion in Bitcoin short positions were liquidated on Wednesday, forcing bearish traders to repurchase coins as prices jumped. That squeeze provided the fuel for the first leg higher, but market participants are now asking whether real buyers can sustain the momentum once that forced buying subsides.
“Squeezes start rallies, but they don’t sustain them,” said Gideon Hyams, chairman and co-founder of STS Digital. He noted that falling long-end Treasury yields, returning ETF flows, and a clearer regulatory path in Washington are providing more durable support than the short covering alone.
U.S. spot Bitcoin ETFs attracted $517.19 million in net inflows on August 19, the strongest daily figure since May 4, according to SoSoValue data. The following session saw a much quieter $38.6 million, underscoring the outsized nature of Wednesday's surge. Analysts say the key is whether inflows remain positive after the initial excitement fades.
On-chain indicators are also turning more constructive. CryptoQuant founder Ki Young Ju noted that Bitcoin demand in both spot and perpetual-futures markets turned positive simultaneously for the first time since the October 2025 all-time high. However, he cautioned that the improvement is still modest and would need to persist for roughly another month before confirming the end of the bear market.
CryptoQuant head of research Julio Moreno echoed that sentiment, telling Decrypt that the rally could remain sustainable if spot-demand growth continues after the macro catalysts fade, but that broader bull indicators have not yet confirmed a new regime.
The move above $76,000 is more significant than the initial squeeze, but it is not yet definitive. Investors are watching whether ETF inflows and spot buying can maintain their pace, as the broader crypto rally continues to unfold. Related moves in Ethereum and other major assets have also drawn attention, while gold's surge highlights the macro backdrop.
For now, the market is in a wait-and-see mode. The short squeeze has passed, and the next phase depends on whether genuine demand can take over. If ETF inflows continue and spot buying persists, Bitcoin could be on a firmer footing. But without that consistency, the rally may struggle to extend.
This article is for informational purposes only and does not constitute financial advice.
