Bitcoin Tests Key Resistance Zone as Strong ETF Inflows Fuel Rally

A record-breaking short squeeze in August triggered a rebound of approximately 26% from the mid-August lows, and Bitcoin is now facing a test at the $81,000, $86,000 supply zone. Unlike previous short-lived squeezes driven purely by leverage, this rally is backed by genuine buying pressure: US spot ETFs recorded their strongest weekly inflows of the year, with Bitcoin continuing to flow out of exchanges net.

The largest single-day short liquidation event on record occurred on August 19, with short liquidations accounting for 85% of total liquidations. The rebound was not driven by new longs chasing price, but rather by forced liquidations from a concentrated release of stop-losses.

Funds are flowing up the size ladder from mid-sized whales to large custodial institutions, and all wallet size cohorts on-chain are showing simultaneous accumulation. This trend intensified during the squeeze week, with the custodial cohort adding approximately 31,500 BTC.