Bitcoin surged above $76,000 on Friday, extending a powerful rebound as signs of returning institutional and spot demand began to replace the short squeeze that initially drove prices higher.
Bitcoin traded around $76,478 during the European morning, building on a rally that accelerated after the US Treasury expanded long-dated bond buybacks and Washington delivered fresh crypto-friendly policy signals.
The first leg was heavily mechanical. About $2.75 billion of Bitcoin short positions were liquidated on Wednesday, forcing bearish traders to buy back coins as prices jumped.
The more important question now is whether genuine buyers can keep the rally alive after that fuel fades.
The short squeeze lit the fuse
Bitcoin’s breakout gathered momentum as lower long-term Treasury yields improved liquidity expectations and a weaker dollar supported risk assets.
That backdrop collided with unusually bearish positioning. CoinGlass data showed $2.75 billion of Bitcoin shorts liquidated on Wednesday, helping push the cryptocurrency rapidly through $70,000.
“Squeezes start rallies, but they don’t sustain them,” Gideon Hyams, chairman and co-founder of STS Digital, told The Block.
He argued that falling long-end yields, returning ETF flows and a clearer regulatory path in Washington gave the move more support than forced buying alone.
That distinction matters because short covering eventually exhausts itself. Once leveraged bearish positions have been cleared, continued gains require investors who actually want to own Bitcoin.
ETF money is returning, but consistency matters
US spot Bitcoin ETFs attracted $517.19 million on August 19, their largest daily net inflow since May 4, according to SoSoValue data.
The next session was much quieter. Preliminary flow data showed roughly $38.6 million of net inflows on August 20, extending the positive run but underscoring how unusual Wednesday’s half-billion-dollar surge was.
That slowdown is not inherently bearish. What matters is whether positive flows persist after the excitement surrounding the breakout fades.
Real institutional demand now appears to be participating. It simply has not yet established the consistency needed to prove that the rally can sustain itself without derivatives-driven momentum.
Demand is improving, but a new bull market is not confirmed
On-chain indicators are also becoming more constructive.
CryptoQuant founder Ki Young Ju said Bitcoin demand in both spot and perpetual-futures markets turned positive simultaneously for the first time since the October 2025 all-time high.
But he also urged patience. Ju said the improvement remains modest and would need to persist for roughly another month before it would be reasonable to conclude that the bear market has ended and a new bull cycle has begun.
CryptoQuant head of research Julio Moreno offered a similar warning to Decrypt.
He said the rally could remain sustainable if spot-demand growth continues after the initial macro catalysts fade, but noted that CryptoQuant’s broader bull indicators have not yet confirmed a new regime.
That makes Bitcoin’s move above $76,000 more meaningful than the initial squeeze, but not definitive.
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