Why are cryptocurrencies rising today? Bitcoin reports US$77,580, revealing the three real drivers

Three days ago, Bitcoin was still at $64,400, and this column wrote about how it quietly maintained the range. Today, it is trading at $77,580, up 13.2% in 24 hours, while Ethereum is trading at $2,388 after breaking through the $2,000 mark it has been tracking since July. Ethena gained 50%, Pump.fun gained 19.8%, and Solana gained 8.1%. When markets move so quickly, explanations rise faster than prices, so the following three factors, in order of importance, do have evidence to support them.

First, the U.S. Treasury has quietly changed the liquidity landscape

This is the driving factor behind the undervaluation of most crypto reports and has nothing to do with cryptocurrencies. The U.S. Treasury Department announced that it will double the size of long-term bond repurchases from US$2 billion per transaction to at least US$4 billion starting September 9. Long-term yields fell sharply after the news was announced, and Secretary Bessent signaled his willingness to intervene further in the long-end market.

Why this is transmitted to Bitcoin: When the government buys back its own long-term debt, it injects cash into the financial system and drives down the yields on the safest long-term assets. All risky assets are priced on this basis. As risk-free returns decline, the relative reasons for holding volatile assets increase, and capital that had been stuck in bonds begins to look for other places. Several market participants described the intervention as functionally similar to quantitative easing, but without labeling it.

James Ravish of the Bitcoin Opportunity Fund bluntly pointed out that Bitcoin soared because the Treasury Department signaled it would do whatever it takes to prevent long-term yields from rising, and explicitly refuted reports that attributed credit to the White House meeting. This is the interpretation of one participant, not the conclusion, but the timing supports the view that the rally started before political headlines emerged.

2. Institutional buying has reappeared and is well documented.

The U.S. spot Bitcoin ETF had a net inflow of US$517 million on August 19, the strongest single-day performance since early May. On August 20, a net inflow of US$606 million, and the Ethereum Fund also increased by US$221 million on the same day. For comparison, total net inflows of these products in July were approximately $172 million.

This is important because this is a verifiable spot demand, not a story. The daily flow table is released publicly, which means that anyone can verify for themselves whether the follow-up continues, rather than trusting the title.

Here's an honest reminder: One day of large inflows confirms a breakthrough, two days suggest a pattern, and the difference between a true institutional return and a brief rebalancing will emerge on days three and four, not on day one. Focus on the data sheet rather than the excitement.

3. Shorts were crushed, but this did not mean that buying

bearish positions lost a record US$2.7 billion in this surge, of which more than US$1 billion were forcibly closed within an hour.

This part needs to be treated with caution. Closing positions is forced buying: traders opposed to the market are automatically closed, and closing out short positions means buying assets. This buying is real and drives prices up sharply, but it is mechanical rather than voluntary. Of the $2.7 billion, no one thought Bitcoin was worth more; they were just forced to liquidate their positions by exchanges.

A large part of such rapid market movements comes from this mechanism, and it has a natural limit: when the bears are eliminated, it stops. If you want to know how the market can rise 13% in one day and then stagnate for a week, the answer is in this number. Similar views on mandatory and involuntary capital flows are elaborated in another token unlocking guide, and the principles are the same.

What about the impact of political headlines?

President Trump met with crypto executives and regulators at a White House meeting on August 19 and urged Congress to pass a version of the CLARITY Act that would define whether digital assets are regulated as securities or commodities. The bill is still pending in the Senate, with a procedural vote scheduled for September, and its status can be checked directly through official channels rather than relying on comments.

The market clearly responded positively to this. However, regulatory optimism has pushed up cryptocurrency prices many times before, but legislation has never actually been implemented, and a bill on hold is a bill that has not yet been passed. At least until the September vote is out, it should be seen as emotional support rather than structural change.

Part that no one wants to mention

Bitcoin is at US$77,580, still about 38% below the all-time high of US$126,198 set on October 6, 2025. A one-day gain of 13% feels like a paradigm shift internally, but the chart shows that the market is only regaining ground previously reached rather than breaking new ground.

Technical indicators also show that the rally has extended: The Relative Strength Index is close to 78 on the hourly chart, in a clear overbought region, and analysts point out that the US$73,000 to US$77,800 range may be a subsequent consolidation range. Overbought doesn't mean a top, it means that the easiest part of the market may be over.

And the underlying structure honestly reveals what could break this situation. Bitcoin is back on its feet and holding on to $70,000 for the first time since early June. Below this, the old $64,000 level-which has been seen as support in July and August-will come back into play if ETF flows reverse quickly.

So, is cryptocurrency back?

The honest answer is that three real things are happening at the same time: a shift in macro liquidity, a reliable return in institutional buying, and a violent liquidation of bearish positions. The first two can be superimposed, but the third cannot-it is a single incident and is now basically exhausted.

What needs to be focused on in the next week is simple and specific: whether ETF inflows continue to be at this level; whether Bitcoin will accept more than $70,000 as it accepted $64,000 in July; and whether the Treasury will deliver on its promise on September 9. These three answers will tell you whether this is the starting point for a new round of market or the best rally of the year, and you don't need any predictions to observe them.

This article is for information reference only and does not constitute investment advice. Crypto assets fluctuate very much and you may lose all your principal. Please be sure to study it yourself.