Bitcoin

On Aug. 19, US Treasury Secretary Scott Bessent said the Treasury would double long-dated bond buybacks after the 30-year Treasury yield hit a 19-year high. While the increase from $2 billion to $4 billion per operation isn’t huge, several market participants read the move as a step toward <a href="https://coinmarketcap.com/academy/glossary/yield-curve" rel="noopener noreferrer">yield curve</a> control and quantitative easing-like policy.Bessent’s statement shifted a narrative-driven crypto market into the age-old framework anchored on the belief that sticky inflation and easy-money government policies are great for Bitcoin (<a href="https://coinmarketcap.com/currencies/bitcoin/" rel="noopener noreferrer">BTC</a>) and hard assets. This perception of balance-sheet manipulation fits into the monetary-debasement trade framework that Bitcoiners love. A quick flip through BloombergTV or X (formerly known to traders as Crypto Twitter) will reveal multiple discussions of the “debasement trade” being in full effect.Markets began shifting weeks before talk of an Operation Twist-style intervention. On July 31, the US and Japan jointly intervened in currency markets to support the Japanese yen, which had hit a 40-year low.As a result, DXY dropped and gold rallied. Meanwhile, Secretary Bessent’s follow-up decision to double long-bond buybacks kicked off a hard-asset rally in Bitcoin, gold and several crypto-adjacent stocks. Strategy’s Stretch (STRC) traded within dollars of its $100 peg, while COIN, CRCL, and other crypto-related stocks saw double-digit gains.<h2 id="will-operation-twist-again-press-fed-credibility-and-independence">Will Operation Twist Again Press Fed Credibility and Independence?</h2>Federal Reserve credibility remains an issue, and its response function under Chair Kevin Warsh remains unclear to markets. Warsh threw out the convention of issuing forward guidance in his first FOMC presser and prior to his Aug. 28 Jackson Hole speech. Markets viewed him as vague about the Fed’s renewed objectives beyond a handful of task forces aimed at reviewing the Fed’s mandate and modernizing its policies.The Treasury’s effort to push long-bond yields lower may intensify concerns about Fed independence, particularly if markets begin to expect coordinated action from the central bank. This has been a concern among analysts ever since President Trump began heavily criticizing former chair Jerome Powell and looking for candidates who would "immediately lower interest rates.”The Fed's clearest objectives remain its 2% inflation target and maximum employment. In the Aug. 28 Jackson Hole speech, Warsh <a href="https://www.federalreserve.gov/newsevents/speech/warsh20260828a.htm" rel="noopener noreferrer nofollow">said</a>,<blockquote> “It's the Fed's job to make sure that inflation expectations do not get unanchored. There is one signal nobody can miss: The responsibility for 65 months of sustained, elevated inflation sits squarely with the central bank. And that is where it belongs. Here is my standard: We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do. That's our job, our mandate, and our charge to keep.”
</blockquote><img src="https://academy-public.coinmarketcap.com/optimized-uploads/52b5b0944bde4ba4827936552b9e8a81.png">Fed hike-and-hold odds in September. Source: <a href="https://x.com/EdwardLawrence/status/2093040365431652432?s=20" rel="noopener noreferrer nofollow">Edward Lawrence</a> / XThe Aug. 26 PCE print showed <a href="https://coinmarketcap.com/academy/glossary/inflation" rel="noopener noreferrer">inflation</a> remained sticky, with headline PCE at 3.7%, slightly above the expected 3.6%, and core PCE at 3.3%, in line with expectations. This leaves wiggle room for the Fed to hold rates and see how goods pricing versus demand plays out over the coming months.<h2 id="bitcoin-etf-volumes-liquidations-fuel-surge-above-81k">Bitcoin ETF Volumes, Liquidations Fuel Surge Above $81K</h2>More than $4.5 billion in leveraged positions were <a href="https://coinmarketcap.com/academy/glossary/liquidation" rel="noopener noreferrer">liquidated</a> across futures markets as Bitcoin broke through $70,000 last week, while nearly $2 billion in net Bitcoin ETF inflows over five sessions also shifted investor sentiment.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/5ffbb5498bc24237aafaf89cbc6b40d1.jpg">Bitcoin liquidations fueled rally to $81,000. Source: <a href="https://x.com/glassnode/status/2092626661267444098?s=20" rel="noopener noreferrer nofollow">Glassnode</a> / XThe price action regime has clearly shifted from sell the rips to buy the dips. Investors are now buying to sell later, instead of selling to buy back lower, and after a long period of low <a href="https://coinmarketcap.com/academy/glossary/volatility" rel="noopener noreferrer">volatility </a>and high apathy in investor sentiment, the rally through the $70,000 resistance appears to have put the final nail in the bear market coffin.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/c6207f31978447fe8b1a078ab15c6adb.png">Bitcoin capital flows, US Treasury yield-curve-control ends bear market. Source: <a href="https://x.com/FINTECHTVglobal/status/2092673435109318689?s=20" rel="noopener noreferrer nofollow">Ray Salmond / X</a>Bloomberg data showed gold and BTC ETFs combined for more than $7 billion in inflows over the past week, and the <a href="https://coinmarketcap.com/academy/glossary/exchange-traded-fund-etf" rel="noopener noreferrer">ETFs</a> are back in the top10 most traded. Data also show BlackRock’s IBIT year-to-date flows turning positive ($1.31 billion) this week, and the ETF notched the largest buy-side skew in 2 years. For the first time in weeks, retail and institutional investor capital flows are in tandem, with ETF inflows accelerating into a rally that was fueled in part by short liquidations.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/99f4d5e377644220afc17d6ae6373ed1.png">IBIT year-to-date flows turn positive. Source: <a href="https://x.com/EricBalchunas/status/2092612266273517840?s=20" rel="noopener noreferrer nofollow">Eric Balchunas</a> / XBernstein is now calling for a $150,000 BTC price by mid-2027, while VanEck says that its 12 Signal model may signal that the <a href="https://x.com/CoinMarketCap/status/2092818177294021085?s=20" rel="noopener noreferrer nofollow">bear market is finally over</a>.<h2 id="will-bitcoin-take-a-breather">Will Bitcoin Take a Breather?</h2>In terms of the rally’s potential duration, profit-taking in the $80,000 to $100,000 range seems reasonable given the magnitude of the rally (40% up from the $58,000 “bottom”). As of Aug. 27, 69% of the BTC supply is in profit, up from 45% in July.CryptoQuant’s age-band cost basis map shows a dense accumulation block at $64,000, the fourth-largest investor cost basis band representing about 9.8% of BTC’s supply.At the same time, 32.4% (6.5 million BTC) of Bitcoin’s supply remains underwater with concentration bands around $87,000, $94,000 and $105,000. This overhead shelf represents potential sell pressure, as some investors may cut exposure as price pushes into the low $80,000s and others may exit at breakeven if the rally extends into the overhead UTXO realized price distribution (URPD).<img src="https://academy-public.coinmarketcap.com/optimized-uploads/327c717611004c7191e18738fb93a514.jpg">Bitcoin cost basis vs supply. Source: <a href="https://x.com/glassnode/status/2092982832062751089?s=20" rel="noopener noreferrer nofollow">Glassnode</a> / XTechnical indicators are likely to look overbought in the $80,000 to $100,000 range, so a consolidation phase after a 30% sub-two-week move seems reasonable. That said, the market sentiment and price action reset suggests that price is now reflexive to the upside. Flows from the spot, ETF, institutional, and <a href="https://coinmarketcap.com/academy/glossary/futures" rel="noopener noreferrer">futures</a> markets show investors shifting to a buy-to-sell mentality, rather than the last eight months of selling to buy back lower.<h2 id="what-s-on-the-radar">What’s on the Radar?</h2><ul><li>Is Bitcoin overbought? Is a mean reversion and consolidation to $64,000 to $70,000 the next step?</li><li>Over the coming week, how will markets digest the contents of Fed Chair Warsh’s Jackson Hole speech?</li><li>What direction do Bitcoin aggregate spot and futures flows take, contrasted against spot ETF net flows? How do DXY, the 10Y and 30Y Treasury react amid expanded long-bond buybacks and talk of an Operation Twist-style policy?</li><li>Goldman Sachs projects global AI investment will exceed $1 trillion in 2026. What's the ROI on the CAPEX and how much higher can equities rally at this stage of market euphoria?</li><li>The Treasury’s long-bond buybacks have resurrected the debasement trade (BTC, gold, weak DXY). They have also renewed the Fed independence and credibility discussion. If the buybacks fail to contain 10Y and 30Y yields, pressure for more aggressive intervention could grow. Treasury officials have <a href="https://x.com/CNBC/status/2091851937297715214?s=20" rel="noopener noreferrer nofollow">floated</a> tapping the nearly $1 trillion Treasury General Account (TGA) to expand bond buybacks. What does this mean for inflation and the Fed's 2% inflation target?</li></ul>

Is 100K Bitcoin Up Next? Bear Market Fades as Debasement Trade Begins

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