Bitcoin rally could hold as spot buying outpaces leverage: Bitfinex analysts

Bitcoin climbed about 23% over the past week to trade near $77,535 on Aug. 21, 2026, after an intraday high close to $79,200, according to crypto.news. Bitfinex analysts told the outlet that spot buying, ETF inflows and limited leverage could give the rally more staying power than a typical short squeeze. The move began below $65,000 on Aug. 19, with forced short liquidations helping Bitcoin break out of its previous range. The analysts said spot purchases and returning institutional demand continued supporting the price after much of the short pressure cleared, though they cautioned that smaller retracements remain possible.

Background

The rally described by crypto.news began with a large short squeeze after Bitcoin cleared resistance around $65,000 and then crossed liquidation clusters near $67,000. Traders who had borrowed funds to bet on a decline were forced to buy Bitcoin as exchanges closed positions that no longer held enough collateral. More than $1 billion in crypto short positions were liquidated within about one hour, and total short liquidations later approached $1.79 billion, while a longer market-wide count placed bearish liquidations near $2.7 billion over 24 hours. The forced purchases helped Bitcoin jump from below $65,000 to approximately $69,500 on Aug. 19. Bitfinex analysts told crypto.news that forced liquidations helped Bitcoin break out of its previous range, but spot purchases and returning institutional demand have continued supporting the price after much of the short pressure cleared. The analysts contrasted this with squeeze-led advances that often weaken once traders finish closing bearish positions, saying the combination of ETF demand, improving macro conditions and limited selling could give the latest move a longer runway. They also identified the $68,000 to $69,000 area as the most important support zone because Bitcoin's short-term holder cost basis currently sits within that range.

What happened

According to crypto.news, Bitcoin traded at about $77,535 at the latest check on Aug. 21, 2026, after reaching an intraday high near $79,200. The cryptocurrency was up almost 7% over 24 hours and about 23% over seven days, extending a rally that began below $65,000 on Aug. 19. Bitfinex analysts told the outlet that forced liquidations helped Bitcoin break out of its previous range, but spot purchases and returning institutional demand have continued supporting the price after much of the short pressure cleared. The move began with a large short squeeze after the price cleared resistance around $65,000 and then crossed liquidation clusters near $67,000. More than $1 billion in crypto short positions were liquidated within about one hour, and total short liquidations later approached $1.79 billion, while a longer market-wide count placed bearish liquidations near $2.7 billion over 24 hours. The forced purchases helped Bitcoin jump from below $65,000 to approximately $69,500 on Aug. 19. Derivatives activity provided part of the evidence behind the analysts' assessment: Bitcoin gained between 10% and 11% during the initial breakout, while aggregate open interest rose by only about 4%. The Bitfinex team said the shape of the move is the tell, noting that rallies built on fresh leverage show open interest jumping in step with price. Because open interest increased at a much slower pace than Bitcoin's price, the analysts said spot buying and short covering performed most of the work, and new leveraged positions played a smaller role, reducing the immediate risk of another large liquidation event caused by an overcrowded long market. Bitfinex identified the $68,000 to $69,000 area as the most important support zone because Bitcoin's short-term holder cost basis currently sits within that range.

Market impact

The figures cited by crypto.news show Bitcoin at about $77,535, up almost 7% over 24 hours and about 23% over seven days, with an intraday high near $79,200. The rally began below $65,000 on Aug. 19 and carried Bitcoin to approximately $69,500 that day. During the initial breakout, Bitcoin gained between 10% and 11% while aggregate open interest rose by only about 4%, according to figures cited by Bitfinex analysts. More than $1 billion in crypto short positions were liquidated within about one hour, total short liquidations later approached $1.79 billion, and a longer market-wide count placed bearish liquidations near $2.7 billion over 24 hours. Bitfinex pointed to spot purchases and ETF inflows as evidence that other buyers entered during the breakout. The analysts said the slower rise in open interest means spot buying and short covering performed most of the work, reducing the immediate risk of another large liquidation event caused by an overcrowded long market. They identified the $68,000 to $69,000 area as the most important support zone because Bitcoin's short-term holder cost basis currently sits within that range, and said trading above the level means recent buyers are collectively holding unrealized profits.

Why it matters

The distinction between a spot-led move and a leverage-led move matters because liquidation demand is temporary, according to crypto.news. Each forced purchase closes an existing position, while continued spot accumulation can remove coins from the available market without creating the same exposure to futures liquidations. Bitfinex analysts said the combination of ETF demand, improving macro conditions and limited selling could give the latest move a longer runway, with smaller retracements still possible. Open interest will therefore remain one of the main indicators for judging the rally. A sharp increase in leveraged positions without matching price gains would weaken Bitfinex's current reading, while steady prices accompanied by restrained open interest would remain consistent with a spot-led move. The analysts also said a weaker version of the setup would show open interest building quickly while Bitcoin stops rising, and that the latest data had not displayed that pattern, although derivatives positioning will remain important if traders add leverage after the price increase. Bitcoin trading above the $68,000 to $69,000 short-term holder cost basis means recent buyers are collectively holding unrealized profits, which the analysts said could limit pressure.