coindesk.com
Bitcoin went ballistic this week (finally).
While more than $4 billion in short positions were liquidated, the bigger story is the pain the rally brought for the ether bears.
Ethereum's token saw the sharpest rally among the major cryptocurrencies. At one point on Wednesday, when the market started moving sharply, $ETH rose nearly 19% over 24 hours, versus roughly 5%-6% for bitcoin. Currently, $ETH is up about 18% in the last seven days, while bitcoin has risen about 8.8%, according to CoinDesk data.
The scale of the move saw a cascade of short positions getting violently liquidated as momentum brought in more momentum, after crypto spent much of this year doing pretty much nothing.
The rally brought hope to the market, but the short squeeze left some traders cautious.
"Squeeze-led rallies usually carry a question mark over whether they hold, because liquidations do the lifting. Here, the combination of ETF demand, the macro shift and the absence of heavy selling gives this one a longer runway, with small retracements along the way," said Bitfinex analysts.
While the rally took most of the attention, there was some significant news from Washington as lawmakers moved on several fronts for crypto regulations, traditional firms had moved deeper into stablecoin payments, and corporate crypto treasuries had suddenly looked healthier.
Here were five stories that defined the week.
1. Markets: Crypto goes ballistic — and shorts paid for it
Bitcoin crossed $70,000 for the first time since June after a violent move up on Wednesday.
The daily percentage changes for the largest cryptocurrency over the past year showed a market that had mostly ground through, with smaller gains and losses in 2026, punctuated by occasional violent moves. August’s cluster of green bars for bitcoin marked one of the strongest bursts of upside in months, according to CoinDesk data.
The rally followed after several catalysts lined up at once.
One came from the bond market. The U.S. Treasury’s buyback program supported liquidity in government debt, and longtime bond investor Mark Connors argued that the effect could help set up bitcoin’s next move toward $180,000.
Another catalyst was the liquidation of short positions. With the two-day rally, over $4 billion in crypto shorts were wiped out.
But ether was where the squeeze got truly nasty for bears.
$ETH became the biggest gainer among the top five cryptocurrencies, rising nearly 19% over 24 hours at one point on Wednesday. XRP and solana also gained more than 10%, while bitcoin climbed more than 5%, over the same time period.
What this week showed is that, regardless of how tough a bear market has been, the mood could change once liquidity and positioning turn.
However, focus now turns to the longevity of this rally and how the policies from Washington turn out in the next month.
"Although the current rally may have room to run, our view is that it remains premature to call an end to the current crypto correction or the beginning of a climb to new highs," said Jefferies analyst Andrew Moss.
"We're focused on the Sept. 15 Senate cloture vote on the Clarity Act and a potential unveiling of an SEC innovation exemption for tokenized securities."