# Bitcoin Nears $77,000 as Short Squeeze Liquidates $2.7B

**Published:** 2026-08-24T07:16:50.078Z  
**Topic:** Bitcoin  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/f7fb3d6e-ab0f-4767-b397-f7eaabc74e03

Bitcoin surged to $77,000, up 23% in a week, liquidating $2.7 billion in short positions. Treasury bond buybacks and regulatory hopes fueled the rally.

Bitcoin climbed to approximately $77,000, marking a 23% weekly gain and liquidating an estimated $2.7 billion in crypto short positions, according to CoinGlass [2]. This rally, which began mid-week, has been attributed to a combination of macroeconomic shifts and renewed optimism for crypto regulation, though the market remains below its all-time high [2].

| At a glance | |
|---|---|
| Current Price | ~$77,000 [2] |
| Weekly Gain | ~23% [2] |
| Short Liquidations | ~$2.7 billion [2] |
| Key Catalyst | Treasury bond buybacks, Clarity Act hopes [2] |

## Market Dynamics and Catalysts

Bitcoin's price surge from about $62,800 at the start of the week to around $77,000 on Friday was primarily driven by two factors [2]. The rally initiated on Wednesday following a sharp pullback in Treasury yields, which occurred after the Treasury's intervention in the bond market [2]. This intervention involved a decision to double buybacks of long-dated government debt, aimed at addressing rising borrowing costs and concerns over U.S. debt levels [2]. This easing of pressure on risk assets helped trigger a broader move into cryptocurrencies [2].

The initial move was then amplified by a "massive short squeeze," leading to the liquidation of approximately $2.7 billion in crypto short positions [2]. This indicates that many traders betting on a price decline were forced to close their positions, further pushing prices up. Crypto-linked stocks also saw gains, with Coinbase and Circle advancing more than 9% each, and Strategy up 7% [2].

Investor sentiment received an additional boost on Thursday from a push by the White House and crypto industry leaders to advance the Clarity Act [2]. This bill is seen by some as a potential catalyst to move the market out of its "crypto winter," which began last fall, although its chances of passing are considered relatively slim [2].

## Broader Market Context and Outlook

Despite the recent rally, Bitcoin's current price of around $77,000 remains significantly below its 2026 high of $94,820, achieved in mid-January, and its all-time high of $126,198, reached on October 6 last year [2]. Lucy Gazmararian, founder and managing partner at Token Bay Capital, stated on Friday that the crypto market is nearing the end of its bear market [2]. She anticipates "one final flush," with a potential drop of another 20%, which she views as consistent with prior market cycles [2]. Gazmararian noted that the market was "heavily leveraged short," and these positions have now been "wiped out" [2]. She emphasized that traders are "very savvy to the cycles of bitcoin" and position themselves accordingly in the months leading up to a cycle turn [2].

Gazmararian advises investors to maintain a "longer-term thesis" for Bitcoin, viewing it as "a play against monetary debasement" [2]. However, she also acknowledged its short-term volatility, describing it as "a great playground for traders" due to the availability of tools for betting on price movements [2].

## What to watch

*   **Clarity Act progress:** Monitor legislative developments regarding the Clarity Act, as its passage could significantly impact market sentiment and regulatory certainty [2].
*   **Treasury bond market actions:** Observe further actions by the Treasury regarding long-dated government debt buybacks, which could continue to influence risk asset appetite [2].
*   **Bitcoin price levels:** Watch for Bitcoin's ability to sustain levels above $70,000, or if it experiences the "final flush" drop of approximately 20% anticipated by some analysts [2].

The recent Bitcoin rally highlights the impact of both macro-economic policy and market positioning on crypto asset prices, demonstrating how large-scale liquidations can accelerate price movements even as regulatory clarity remains uncertain [2].

## Sources
1. CNBC — [Heavily-leveraged Bitcoin shorts wiped out: Token Bay Capital](https://www.cnbc.com/video/2026/08/21/heavily-leveraged-bitcoin-shorts-wiped-out-token-bay-capital.html)
2. Cnbcafrica — [Bitcoin on track for 23% weekly gain as investor... | CNBC Africa](https://www.cnbcafrica.com/2026/bitcoin-on-track-for-20-weekly-gain-as-investor-optimism-floods-back)

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Cite as: TrendWatcher, "Bitcoin Nears $77,000 as Short Squeeze Liquidates $2.7B", https://www.trendwatcher.in/article/f7fb3d6e-ab0f-4767-b397-f7eaabc74e03