Analysts at K33 and Bitwise said on Aug. 26 that Bitcoin’s record short squeeze, a reset in leverage, and a macro catalyst linked to U.S. Treasury Secretary Bessent may indicate the market is turning toward a broader bullish reset.
Bitcoin gained 23% over the past week, its strongest weekly performance since the post-U.S. election rally in November 2024. Over the same stretch, spot and perpetual futures trading volume increased 188%, CME trading volume rose 152%, and Bitcoin investment products recorded net inflows of 31,740 BTC.
Short liquidations reached unusually large levels
K33 head of research Vetle Lunde said $1.37 billion in Bitcoin shorts were liquidated on Aug. 19, close to twice the previous one-day record of $757 million set in July 2021. Another $739 million in shorts were liquidated on Aug. 21.
After that move, notional open interest in perpetual futures fell to 284,000 BTC, the lowest level since May, while funding rates returned to neutral. K33 said large short squeezes have historically tended to appear around Bitcoin bottoming phases.
Options and moving-average signals also shifted
Other indicators changed at the same time. Bitcoin’s six-month 25 delta options skew turned negative for the first time since September 2025, meaning call options were priced above puts. That ended an 11-month period in which the market had been paying a premium for downside protection.
Bitcoin also reclaimed its 50-day, 100-day, 200-day, and 200-week moving averages within four days, faster than in any previous cycle. Historically, instances where those levels were recovered within 45 days occurred only in October 2015, April 2020, and October 2023, each near the start of a cyclical bull market.
Macro backdrop and correlations added to the case
Analysts also described Bessent’s push to increase buybacks of longer-dated U.S. Treasuries as an additional catalyst.
On cross-asset relationships, Bitcoin’s 90-day correlation with gold rose to 0.52, the highest since October 2020. Its correlation with the Nasdaq fell to 0.38, the lowest point in a year.
Bitwise Chief Investment Officer Matt Hougan said that as the global financial system is used more as a geopolitical tool, a neutral monetary network that sits outside any single national banking system and can be transferred globally becomes more valuable.