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.

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.