The cryptocurrency market experienced a dramatic shift in momentum in late August 2026, with digital assets surging to break a 5-year record. The total crypto market cap climbed roughly 24% in a single week, adding over $474 billion in value to reach a staggering $2.67 trillion. This marks the largest weekly gain the crypto market has seen since February 2021. With the sentiment shifting from prolonged fear to “extreme greed,” this CRYPTO MARKET OVERVIEW examines the fundamental drivers, institutional metrics, and technical indicators behind the ongoing price action.
U.S. Treasury Buybacks Trigger Crypto Market Response
The sudden reversal in market sentiment can be traced directly to macroeconomic policy shifts from Washington. On August 19, 2026, the U.S. Treasury announced it would double its maximum long-end debt buybacks for 10-to-30-year nominal coupon securities. Beginning September 9, this purchase cap will increase from $2 billion to at least $4 billion per operation. The announcement immediately weakened the U.S. dollar and lowered bond yields, nudging investors toward risk assets like cryptocurrencies and catching bearish traders entirely off guard.
Well shake it up baby now
Twist and shout
Come on baby, Work it on outTwist and Shout https://t.co/HOqHyDp4Ak via @YouTube
The Trump Administration is committed to crypto. Bitcoin gained roughly 22% for the week and finished August 21 near $77,000–$78,000, while the S&P 500… pic.twitter.com/mN39YQsbRX
— Julie Wade (@julie_wade) August 22, 2026
This dynamic sparked a historic short squeeze. Short liquidations reached $2.74 billion on August 20 alone, wiping out 172,202 traders in a single session, and ultimately climbed above $4 billion over the ensuing breakout window. The speed of this sentiment shift has been equally historic. The Crypto Fear and Greed Index skyrocketed to 74 on August 25, a level last seen on October 5, 2025, while CoinMarketCap’s own index hit 81, placing the market firmly in the “extreme greed” category.
These favorable liquidity conditions particularly benefit risk-on equities. Wall Street giant Goldman Sachs turned cautiously optimistic for the second half of 2026, lifting its price target on Coinbase (COIN) to $196 and maintaining a buy rating. Similarly, Canaccord Genuity raised its target for MicroStrategy (MSTR) by 35% to $175, declaring that the setup for the stock had “materially brightened”.
“Buy-rated COIN offers upside optionality from any persistent improvement in the crypto backdrop, and continues to see strong idiosyncratic growth in newer businesses (including derivatives and prediction markets).”
— Goldman Sachs Analysts
Technical Analysis Reveals Bitcoin Bullish Potential
Bitcoin just entered a new bull market.
Bull Score: 30 → 80 in a week, the fastest flip in a year.
$83K is the only thing left standing in the way. pic.twitter.com/7nD1bb14QM
— CryptoQuant.com (@cryptoquant_com) August 25, 2026
Our CRYPTO MARKET OVERVIEW reveals that Bitcoin supplied much of the price momentum, climbing 24% to briefly cross $81,250 for the first time since May before pulling back to consolidate near $79,250. From a technical perspective, Bitcoin moved decisively above its 200-day simple moving average (SMA) of $69,166, signaling a major structural change from the summer doldrums. However, the rapid ascent pushed the daily relative strength index (RSI) to 82.44, placing it deeply into overbought territory.
Traders are now laser-focused on a massive $6.4 billion Bitcoin options expiry scheduled for Friday on Deribit. Shaun Fernando, Deribit’s Chief Risk Officer, explained the stakes: “Over half a billion in notional sits within a 5% move of the current price, which should result in increased gamma hedging in the build-up to expiry”. Market makers hedging their exposure could cause the spot price to pin near key strike levels, particularly the heavily favored $80,000 call option strike.
$BTC liquidity sweep at $80K–$81K. Exactly as predicted. 🎯
Did you trade this move?
Two big announcements are coming today, friends. Let’s keep growing this community, I want to give something back and reward those who’ve been here supporting the journey.
Stay tuned. https://t.co/rINmxqpX0d
— Ted (@TedPillows) August 26, 2026
Liquidation heatmaps confirm that a stronger move below the $78,000 support level could draw prices toward additional liquidity around $77,200. Conversely, to resume the bullish breakout, Bitcoin needs to reclaim and hold the $79,200 to $80,000 area on a closing basis to target the May resistance region of $82,000 to $83,000.
Spot ETFs and Institutional Market Depth Fuel Optimism
The cryptocurrency surge coincides with major institutional developments for privacy coins and altcoins. On August 25, Grayscale officially launched the first U.S. exchange-traded product offering direct exposure to Zcash on NYSE Arca under the ticker ZCSH. Steve Vanourny, Grayscale Head of Index, provided insight into the token’s institutional appeal: “As AI reshapes how financial activity can be monitored, we believe demand for genuine financial privacy will only grow”.
Zcash rallied heavily on ETF anticipation, surging 60% to an eight-year high near $880 before traders started taking profits, cooling the token down to $787. Zcash’s network momentum was further secured by the recent Ironwood upgrade, which successfully patched a critical vulnerability in the Orchard shielded pool and introduced new accounting rules to prevent counterfeiting.
Spot Bitcoin ETFs absorbed a staggering $337.56 million on August 24 alone, while Ethereum funds pulled in $115.57 million. Solana ETFs also saw their largest daily inflows since late 2025, capturing $33.49 million. Despite the “extreme greed” sentiment, some analysts warn the rally lacks broad structural confirmation, as ETFs remain net sellers for 2026 with total holdings down by approximately 92,000 BTC year-to-date.
CRYPTO MARKET OVERVIEW FAQ
What triggered the recent $4 billion crypto short squeeze? The massive short squeeze was primarily catalyzed by the U.S. Treasury’s announcement on August 19, 2026, that it would double its long-end debt buybacks to at least $4 billion per operation starting in September. This decision weakened bond yields and the U.S. dollar, driving sudden institutional demand for risk assets like Bitcoin and catching bearish traders off guard, resulting in over $4 billion in liquidated short positions.
Are institutional investors continuing to buy Bitcoin and altcoins? Yes, institutional demand is visibly accelerating in the short term, though long-term metrics remain mixed. Spot Bitcoin and Ethereum ETFs collectively pulled in over $2.3 billion in a matter of days following the Treasury announcement, and newer products like Grayscale’s Zcash ETF (ZCSH) and Solana ETFs have logged multi-month highs for daily inflows. However, when looking at the year-to-date data, U.S. ETFs still remain net sellers for 2026.
Is the current Bitcoin rally expected to face a pullback? Yes, a short-term correction is highly possible. Technical indicators show Bitcoin’s daily RSI reaching 82.44, placing the asset deep inside overbought territory. Analysts have identified bearish divergences on lower timeframes and noted heavy liquidation clusters around the $78,000 support level. Furthermore, the impending $6.4 billion options expiry could inject significant volatility into the market by the end of the week.
What are your primary price targets and accumulation zones if Bitcoin retraces toward the $72,000 support level?
