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Following July’s stable performance, BTC had a strong month in August, starting at $62,899 and ending at $78,852, generating a return of 25.4%. Most of the gains were achieved during the third week of the month: BTC saw the single largest one-week gain in its entire history between Aug. 16 and Aug. 23. By percentage, that week’s BTCUSD weekly candle ranked 41st of 840 weeks in the trading pair’s history at +23.5%. Since 2020, only three weeks had a larger percentage gain: March 19, 2023 (+27.7%), Jan. 3, 2021 (+25.9%), and Feb. 14, 2021 (+25.2%). The August rally came during a period of extremely low volatility, with both realized and implied volatility printing near all-time lows.
The record-setting week also coincided with the largest bitcoin ETF inflows since October 2025’s all-time high, and August closed as the biggest inflow month since July 2025, attracting $3.4 billion of capital.
A substantial catalyst was the return of the debasement trade sparked by Treasury Secretary Scott Bessent’s announced expansion of bond buybacks (on the long end). Gold also rallied after the Aug. 19, announcement. Given the U.S. debt profile ($40 trillion, or ~125% of GDP), the debasement narrative is likely to remain highly relevant to investors, which could benefit long-term bitcoin bulls, even if interest in the debasement trade ebbs and flows on shorter time frames.
President Trump also hosted crypto executives at the White House and delivered pro-crypto remarks last month, including calling on Congress to pass the CLARITY Act, and crypto executives held the first meeting of the CFTC’s Innovation Advisory Committee. Both events resulted in substantial positive regulatory headlines and may have contributed to last month’s positive performance.
Aside from the policy catalysts, BTC’s rally was also aided by substantial short liquidations, gamma squeeze, and momentum chasing. With other risk assets (such as AI-related stocks) near all-time highs, and bitcoin trading more than 50% off its prior all-time high but failing to make new lows, BTC was primed to receive inflows from allocators who assessed that it looked “cheap.”
As discussed in a recent Galaxy research alert, one of the historical indicators of the bear market bottom is the 50-week moving average, which stands at $81,473 at the time of writing on Sept. 2. In the past four of the five completed bear markets, once the 50-week moving average was first broken to the upside, the bear market bottom was “in.” (The only exception is during the mini-bear market in between the April and November 2021 all-time highs, a period that most bitcoin analysts don’t even consider to be a “full bear market.”)
If bulls can push BTC to close a weekly candle above the 50w MA, history suggests the bear market may be over.