Bitcoin and Ether rebound: what drove the 19–22 August rally?

Between 19 and 22 August, Bitcoin and Ether staged one of their sharpest rebounds of 2026. Bitcoin rose from around US$64,000 to above US$78,000, while Ether climbed from below US$2,000 to the mid-US$2,000s. The speed of the move was striking—but the evidence suggests several forces arrived at once rather than one clean change in the market’s long-term direction.

The most likely explanation is a combination of macro liquidity, a heavily bearish derivatives market, renewed spot demand and a more supportive regulatory signal from Washington. Each helped, but none on its own proves that the broader bear market has ended.

Four days that changed the near-term picture

The move began on Wednesday, 19 August. Bitcoin traded near US$64,100 before accelerating through the U.S. session. By early Thursday it was above US$69,000, while Ether had jumped about 18% in 24 hours to just over US$2,250. Bitcoin then continued higher, reaching the upper US$70,000s by 21–22 August.

By Saturday morning, Bitcoin was roughly 25% above its midweek level. Ether also recorded a gain of roughly one-quarter over the week. That was a meaningful recovery, but it came after a difficult year: even near US$77,000 on 21 August, Bitcoin remained about 39% below its October 2025 record.

The distinction matters. A strong rebound can repair market structure and sentiment without immediately establishing a new bull market.

First catalyst: the Treasury’s bond-buyback signal

On 19 August, the U.S. Treasury announced that it would at least double the maximum size of its liquidity-support buybacks for 10-to-30-year Treasury securities, from US$2 billion to at least US$4 billion per operation, effective 9 September.

A Treasury buyback is not quantitative easing. It is primarily a debt-management tool intended to improve trading conditions in older government bonds. However, markets interpreted the announcement as a sign that officials were prepared to support liquidity at the long end of the bond market. The 30-year Treasury yield fell from around 5.34% to about 5.19% after the announcement.

That matters for crypto because Bitcoin and Ether do not pay a risk-free yield simply for being held. When long-dated government yields fall, the relative hurdle for owning volatile, non-yielding assets becomes lower. The Treasury decision therefore acted as a macro trigger, even if the size of the programme was too small to represent a fundamental change in monetary policy.

Second catalyst: a powerful short squeeze

The market was already leaning heavily bearish. As prices rose, traders who had sold futures or perpetual contracts short had to buy back those positions, either voluntarily or through forced liquidation. That buying pushed prices higher, which triggered the next layer of liquidations and created a self-reinforcing squeeze.

About US$1.4 billion of crypto short positions were liquidated in four hours during the first leg of the rally. By 22 August, estimates placed total bearish liquidations across Thursday and Friday near US$4 billion. This helps explain why the move was so fast and broad.

The Treasury announcement may have lit the match; crowded bearish positioning supplied much of the fuel.

The squeeze was not the whole story. U.S. spot Bitcoin exchange-traded funds reportedly attracted US$517 million on 19 August and US$606 million on 20 August. Spot Ether funds drew about US$189 million and US$221 million on those respective days. Those flows indicate that real spot demand accompanied the forced buying, giving the rebound more substance than a purely mechanical liquidation event.

The White House meeting: a regulatory confidence signal

The second major headline on 19 August came from Washington. President Donald Trump hosted technology, traditional-finance and crypto leaders at the White House. Participants reported at the public session included executives from Nasdaq, Intercontinental Exchange, Robinhood, Coinbase, Ripple, Kraken and Chainlink, alongside senior financial regulators.

Trump urged Congress to advance the Digital Asset Market Clarity Act, which is intended to establish a clearer federal framework for digital assets. CFTC Chairman Michael Selig said regulators would continue using existing authority while Congress considered the bill. A smaller Oval Office discussion reportedly focused on the remaining issues around the legislation; a strategic Bitcoin reserve was also mentioned, but no new operational details were announced.

The following day, the CFTC’s inaugural Innovation Advisory Committee meeting discussed crypto regulation, artificial intelligence and prediction markets. Together, the events reinforced the administration’s pro-innovation posture and reduced some of the market’s perceived regulatory risk.

Still, a supportive meeting is not the same as enacted legislation. The CLARITY Act remained subject to Senate negotiations, including disagreements over stablecoin rewards, illicit-finance safeguards and ethics provisions. The market received a positive political signal—not final legal certainty.

Why Ether initially moved faster

Ether outperformed Bitcoin during the first stage of the rally, rising about 18% in one day. Part of that move reflected its higher sensitivity to shifts in crypto risk appetite: when capital returns to the sector, Ether often behaves like a higher-beta expression of the same trade.

ETF inflows added a spot-demand component, while short covering likely amplified the price response. However, the first move was driven mainly by macro and market-wide headlines rather than a new Ethereum-specific fundamental development. That makes continued flows and sustained network demand more important than the initial percentage gain.

What would confirm a more durable turn?

A genuine regime change normally requires follow-through. For Bitcoin, one important technical test is whether the market can hold recovered levels—particularly the 200-day moving average, which was near US$69,000 during the rally—and turn former resistance into support.

Persistent spot and ETF inflows would show that new capital is replacing the forced buying from liquidated shorts. A controlled rebuild in derivatives positioning, without excessively positive funding rates, would also be healthier than another leverage-driven surge. Outside crypto, long-term Treasury yields and the path of U.S. regulation remain important: a renewed jump in yields or further legislative delay could challenge the rebound.

Capital Park’s perspective: important rebound, incomplete confirmation

The 19–22 August move materially improved the market’s near-term structure. It broke Bitcoin out of a multiweek range, brought buyers back into crypto funds and showed how quickly sentiment can change when macro conditions and policy expectations turn more supportive.

It is nevertheless too early to conclude that crypto is definitively out of the bear market or that a new bull market has begun. The scale of the short liquidations and the speed of the advance leave open the possibility that a meaningful portion of the rally was a temporary short squeeze. At the same time, the accompanying ETF inflows mean it should not be dismissed as entirely mechanical.

The evidence is encouraging, but not yet conclusive. The next phase will show whether Bitcoin and Ether can hold their recovered levels, attract sustained spot demand and build a sequence of higher lows after the liquidation pressure fades. Treasury yields, ETF flows, derivatives positioning and progress on U.S. market-structure legislation all deserve continued attention.

For now, the most balanced description is a significant rebound with the potential to become a broader upturn—not a confirmed bull market. We will need to continue monitoring the situation ahead.

Sources and further reading: U.S. Treasury: increased long-end liquidity-support buybacks, CFTC Chairman Selig’s White House remarks, CFTC Innovation Advisory Committee agenda, The Block on the White House and Oval Office meetings, CoinDesk on the initial Bitcoin and Ether move, and CoinDesk’s 19–22 August market analysis.