Bitcoin Tops $81,000 for First Time Since May as ETF Inflows Hit $338M and Short Squeeze Wipes Out $452M in Bearish Bets

Bitcoin surged past $80,000 and briefly touched $81,237 on August 25, its highest level in more than three months and the first visit to that price since mid-May, capping an eight-day rally of roughly 25 to 28%. The move was driven by a confluence of factors: a weakening U.S. dollar following Treasury Secretary Scott Bessent's efforts to calm bond markets, Treasury buybacks, new Iran sanctions reshaping the macro backdrop, and a resurgence in institutional demand through spot ETFs. Spot bitcoin ETF products recorded $337.6 million in net inflows on August 24, extending a streak to six consecutive days and pushing cumulative inflows to $54 billion.

BlackRock's IBIT fund captured 62% of the daily total, drawing $209 million on its own. The breakout also triggered a sharp derivatives unwind, with CoinGlass data showing approximately $452 million in crypto short positions liquidated within 24 hours as rising prices forced exchanges to close leveraged bearish bets. The broader crypto market reflected the momentum, with Solana jumping 8% and total crypto market capitalization rising above $2.7 trillion.

Bitcoin's weekly rally pushed its relative strength index into overbought territory, and after briefly topping $81,000 the price pulled back below $80,000 before stabilizing near that level. Option traders moved to bet on prices topping $82,000, while analysts cautioned the bull market case remains early and complicated by sticky inflation and geopolitical uncertainty, framing the move as a catch-up rally rather than a confirmed new cycle. The $81,400 level was flagged as the next key resistance, with $70,000 to $72,000 cited as downside support should the rally stall.