Bitcoin Jumps to $79,000 and Posts Best Week Since 2024: What’s Driving the Rally

Bitcoin has surged sharply, gaining about 23% over five trading days and reaching a local high of $79,455. According to analysts, the massive market rally is driven by liquidity injections from the US Treasury, a $4 billion short squeeze, and a series of regulatory initiatives in Washington.

After hitting peak levels, the market entered a consolidation phase, holding steady around $77,000–$77,500. The market soon tested that scenario: Bitcoin broke through ,000 and analysts began warning about overheating. The market soon tested that scenario: Bitcoin broke through ,000 and analysts began warning about overheating.

US Treasury Liquidity Injections and Macroeconomics

The catalyst for the trend reversal was the US Department of the Treasury’s decision to increase Treasury buyback operations to support liquidity up to $38 billion in the current quarter, as well as purchase an additional $25 billion in short-term bills.

As MarketWatch notes, a sharp drop in Treasury yields and a weakening dollar led to an inflow of institutional capital into safe-haven and risk assets—gold and Bitcoin.

A $4 Billion Short Squeeze and Record ETF Inflows

The sudden price surge caught short sellers off guard. According to Investor’s Business Daily, forced liquidations of short positions exceeded $3 billion in the first 24 hours of the rally, with total closed shorts approaching $4 billion, triggering a classic cascade of market buy orders.

Fundamental demand was supported by institutional funds: according to Farside Investors tracking data, weekly net inflows into US spot Bitcoin ETFs reached roughly $1.6 billion, snapping a multi-month streak of outflows.

Signals from the SEC, CFTC, and a White House Meeting

Concurrently, US authorities signaled a willingness to ease regulatory pressure:

• Regulation Crypto Assets Proposal: The Securities and Exchange Commission (SEC) introduced a framework allowing crypto projects to raise capital through simplified procedures without automatically classifying tokens as investment contracts;
• White House Summit: According to Reuters, the presidential administration held talks with executives of top blockchain companies to discuss advancing the CLARITY Act bill to delineate authority between the SEC and CFTC;
• New CFTC Advisory Committee: The Commodity Futures Trading Commission held the inaugural meeting of its innovation advisory committee, focusing on regulating crypto assets and prediction markets.

The rally lifted the entire sector: overall crypto market capitalization expanded by $500 billion, while Ethereum rose 26%.

Despite the strongest trading week in two years, experts view the move as a recovery: Bitcoin is still trading 39% below its all-time high set in fall 2025, when the asset reached $126,000.