Bitcoin's rally pushes past $72,000 as analysts see demand beyond historic short squeeze

Markets•August 20, 2026, 1:06PM EDT
Make us preferred on Google
Bitcoin's rally pushes past $72,000 as analysts see demand beyond historic short squeeze
Partner offers

Quick Take

  • Bitcoin climbed above $72,000 for the first time since May after a record $2.75 billion in short liquidations helped accelerate a broader crypto rally fueled by improving macro and regulatory sentiment.
  • Analysts say the move is being supported by genuine spot and ETF demand, though Bitcoin will need to hold above $70,000 to show the rally can outlast the short squeeze.

We'd love your feedback.

Advertisement

Bitcoin extended its rally Thursday, climbing above $72,000 for the first time since May, a day after crypto markets recorded their largest-ever short-liquidation event.

Bitcoin shorts were liquidated to the tune of $2.75 billion on Wednesday, CoinGlass data shows, as markets were juiced by expanded Treasury buybacks, the SEC's crypto proposal, and a White House meeting with President Donald Trump that featured some of the most prominent executives in crypto.

"Squeezes start rallies, but they don't sustain them, and this one has more behind it than forced buying," said Gideon Hyams, chairman and co-founder of STS Digital. "Falling long-end yields, returning ETF flows and a clearer regulatory path in Washington are exactly the conditions that turn a bounce into a trend. The test is whether BTC can hold above the range that trapped it since June, and so far it's passing."

Short covering accelerated the breakout, but didn't create it, according to Nicolai Søndergaard, senior research analyst at Nansen.

Søndergaard said the rally has improved bitcoin's technical outlook and is being supported by stronger spot and ETF demand. But with the short squeeze largely over and leveraged longs becoming crowded, whether BTC can hold above $70,000 will depend on continued spot buying.

"Sustained acceptance above $70,000 would keep the outlook constructive, while a pullback toward the $69,700–$69,000 area would be a normal test of the breakout rather than an automatic trend reversal," he said.

Bitcoin trades around $72,345 at publication time, according to The Block's BTC price data. Ethereum (ETH), XRP (XRP), and more have also continued higher, with XRP jumping 20% in the past day.

Of note, CryptoQuant founder Ki Young Ju noted that Bitcoin demand has turned positive in both spot and perpetual futures for the first time since the October 2025 all-time high.

Bitcoin demand in spot and perpetual futures
Bitcoin demand in spot and perpetual futures. Courtesy of @ki_young_ju

"The scale remains modest, but if this holds for another month, it would be reasonable to conclude that the bear market is over and a new bull cycle has begun," he said.

The market's top performers over the past 24 hours could offer an early indication of where investors place their bets if the rally develops into a broader bull market. Wintermute's OTC trading desk said the rally could have broader implications heading into the fourth quarter, particularly as market consensus has increasingly shifted toward expectations of another downturn.

Paul Howard, senior director at Wincent, said the rally followed a period of unusually low volatility and thin liquidity, creating conditions in which positive news could produce outsized moves. He added that the rally's durability would depend on the timeframe, though long-term institutional investors may view the developments as another step toward crypto's broader adoption and maturation.

"24-hour trading volumes have exploded, rising 5x from the yearly low recorded last weekend," Howard said. "The low-volatility environment created the perfect tinderbox, where any positive news could be magnified by thin liquidity into outsized price movement."


Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.