Bitcoin Rally May Have More Staying Power Than Usual: Analysts

Bitcoin's recent rally may have more staying power than usual due to spot buying and ETF inflows, according to Bitfinex analysts. The cryptocurrency has climbed about 23% over the past week to $77,535, with a breakout marked by forced liquidations helping it jump from below $65,000 to approximately $69,500 on Aug. 19.

The analysts point to spot purchases and ETF inflows as evidence that other buyers entered during the breakout, rather than just short covering. This is important because liquidation demand is temporary, while continued spot accumulation can remove coins from the market without creating the same exposure to futures liquidations.

Bitfinex identified $68,000, $69,000 as the main support zone for the recovery, which coincides with Bitcoin's short-term holder cost basis and its 200-day moving averages. A sustained price above this range could limit pressure from holders seeking to exit at break-even, while falling below it would place part of the recent buyer group back into loss.

Renewed increases in Treasury yields and the exhaustion of short covering are potential obstacles to further gains, according to Bitfinex. The analysts also note that a Coinbase Premium that catches up with the rally would provide a cleaner signal that American buyers are returning.