Bitcoin has likely found a local bottom, said Nansen’s Nicolai Søndergaard, but a rejection at $80,000, on top of rising funding and open interest, would signal a leveraged move.

  • Analysts said Bitcoin’s push to $80,000 was driven by new buyers and a forced short squeeze, rather than significant momentum.
  • This was supported by falling short-term Treasury yields and a weaker dollar, according to the analysts.
  • The near-term catalyst seems to be Kevin Warsh’s speech at Jackson Hole summit later this week.

Bitcoin's (BTC) rally toward $80,000 has been driven by both new buyers and forced short squeezes, according to analysts, who say this level will be a key test of whether the move continues and that a near-term catalyst is this week's Jackson Hole symposium.

Why Treasury Buybacks May Only Provide Temporary Relief

Bitunix analyst said on Tuesday that Kevin Warsh's speech at the Jackson Hole symposium is important not because of discussions around rate cuts, “but in whether he can help markets understand how the Federal Reserve views the relationship between inflation, long-term interest rates, and its balance sheet.” According to the analysts, high Treasury yields set the standard for global dollar funding costs.

Also, higher risk-free returns make it harder to value assets with high volatility. For dollar-denominated risk assets in general, things would get better if the term premium went down by a large amount. From an investor's point of view, Utkarsh Ahuja, founder and managing partner at Moon Pursuit Capital, had a similar framing, saying that Bitcoin could no longer be fully understood within a crypto framework.

“Liquidity matters. Bond yields matter. The dollar matters. Regulation matters. Positioning matters. That does not mean every rally is fundamentally justified. Short squeezes can accelerate moves very quickly, and momentum can disappear just as quickly once forced buying has run its course. I would be much more interested in what happens after that mechanical part of the rally fades,” stated Ahuja. 

He added that for the crypto industry “investors, the question is not simply whether rates go up or down. It is whether the businesses we own can still produce attractive returns across several different rate environments.”

Bitcoin’s price was down by 0.3% during the past 24 hours. On Stocktwits, the retail sentiment around BTC remained in the ‘extremely bullish’ zone, while chatter around it stayed at ‘extremely high’ levels over the past day.

Three Factors That Will Decide Bitcoin’s Fate: Nansen Analyst

Nicolai Søndergaard, a senior research analyst at Nansen, said that Bitcoin had likely formed an important local bottom and that the market structure had improved. "I view Bitcoin's latest rally as a meaningful improvement in market structure, but not yet as confirmation that the broader cycle has definitively turned," he said.

Søndergaard said that onchain and market-structure signals were still mixed. He pointed out that selling pressure had eased, selective whale accumulation had resumed, and ETF flows had improved. This was despite weak U.S. spot demand, Bitcoin trading below an important holder cost basis, and derivatives positioning rebuilding ahead of spot confirmation. 

For the recovery to spread, he said three things need to happen — steady positive ETF flows, a positive Coinbase premium, spot-led volume, moderate funding, and open interest that doesn't grow faster than underlying demand. He said that a second rejection at $80,000, with funds and open interest still rising, would show that the move was increasingly driven by pressure. 

Bitcoin Has To Sustain $80K Breakout First

Lacie Zhang, a research analyst at Bitget Wallet, also agreed that a clean break above $80,000 would require spot ETF demand to sustain upward momentum. "The latest move looks real, but it is also very fast," said Zhang, underpinned by lower yields and a softer dollar. 

Zhang predicted $85,000 to $90,000 in the next weeks if Bitcoin closed above $80,000 and held there as support, with $95,000 to $100,000 on strong inflows, but warned the market was stretched after a 20% weekly gain. She said a reset is more likely if funding rates rise, inflows slow, or the level drops. ETH and SOL were predicted to lead the first rotation before infrastructure and DeFi, with BTC dominance dropping and a rising non-Bitcoin market cap as confirmation.

Bitcoin Range-Bound Near $80K As Treasury Risks Mount

CoinShares was more cautious, expecting the market to be range-bound with $80,000 as an upper limit. The firm stated in a research report that the Fed must confirm that policy risks have shifted away from additional tightening before making a decision. The firm reported that whales had stopped selling and started accumulating again, but not at a rate that implied a rapid and sustained breakout, and that Bitcoin had broken above its 200-day moving average.

Analysts criticized the Treasury's extended bond buybacks as "more troubling than supportive.” They said new issuance further down the curve is needed to support the acquisitions, thereby shortening the government's weighted-average maturity and making the fiscal position more sensitive to Fed policies. 

Bitcoin’s price was trading above $79,000, flat over the past day. On Stocktwits, the retail sentiment around BTC remained in the ‘extremely bullish’ zone, accompanied by chatter at ‘extremely high’ levels over the past day.

Read also: Bill Miller’s Son Says AI Trade Is Losing Its ‘Luster’ With Bitcoin Staging A Comeback After ‘Summer Break’

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