Bitcoin held near $78,000 on Monday after closing the weekend at roughly $77,755, its highest level since May and the peak of a run that added about 22% over the past week. The recovery reverses the August 22 flash crash that erased an estimated $108 billion in minutes, and it followed a $1.14 billion cascade of short liquidations, renewed demand for U.S. spot bitcoin exchange-traded funds, and a wave of regulatory signals from Washington. Ether lagged, trading around $2,426 and down 3.3% on the day, while the total crypto market capitalization sat near $2.63 trillion.
A short squeeze is a rapid price jump that happens when traders betting against an asset are forced to buy it back to cover their positions, adding fuel to the move. That mechanism amplified bitcoin’s climb as leveraged bearish bets unwound over the weekend.
- Bitcoin closed Sunday near $77,755 and held close to $78,000 on Monday, a multi-month high last seen in May.
- The move capped a roughly 22% weekly gain and reversed the August 22 flash crash that wiped out about $108 billion.
- About $1.14 billion in short positions were liquidated, accelerating the rally as bearish traders covered.
- Regulatory momentum around the CLARITY Act and a CFTC backstop plan, plus renewed spot ETF inflows, drove demand.
Published: August 24, 2026, 09:00 UTC
What pushed bitcoin to a multi-month high
Bitcoin traded below $62,000 earlier in the month before political and regulatory developments changed the picture. The rally gained speed after President Donald Trump met crypto executives at the White House and urged Congress to pass the CLARITY Act, a digital asset market structure bill that would define when a token counts as a commodity rather than a security.
Coinbase CEO Brian Armstrong publicly endorsed the bipartisan bill during a CBS News interview, arguing it would protect consumers and prevent another FTX-style collapse. The bill passed the House in 2025 but remains stalled in the Senate, where a cloture vote is scheduled for September 15.
Treasury bond market activity and improving risk appetite added support. Standard Chartered forecast that bitcoin could reach $100,000 by year-end, citing shallow drawdowns and a friendlier policy backdrop.
Why the regulatory signal matters
The clearest catalyst came from the derivatives regulator. Speaking on August 20, CFTC Chairman Michael Selig directed staff to explore rules that would let certain crypto exchanges operate as a designated contract market for digital assets, using the agency’s existing authority. Selig said that if the CLARITY Act keeps stalling, the CFTC will move on its own to establish a regime for crypto markets.
Traders read that as a signal that oversight will arrive with or without new legislation, reducing one source of uncertainty that has weighed on institutional participation. The agency is also weighing efforts to bring offshore derivatives venues such as Hyperliquid onshore under U.S. rules.
What comes next for traders and the market
The near-term question is whether bitcoin can hold above $75,000 after a fast, leverage-driven move. Open interest fell by roughly $2.09 billion for bitcoin over the weekend as positions reset, and thin weekend liquidity has already produced sharp swings this month, including the August 22 crash.
Spot bitcoin ETF flows will be a key tell. Renewed inflows helped power the latest leg higher, though ether ETF products have recently drawn stronger monthly demand than bitcoin funds. The September 15 Senate cloture vote on the CLARITY Act is the next scheduled catalyst, and any signal on the CFTC’s rulemaking timeline could move prices before then.
Frequently asked questions
How high did bitcoin go this week?
Bitcoin closed Sunday near $77,755 and held close to $78,000 on Monday, August 24. That marked its highest level since May and capped a weekly gain of about 22%, reversing the flash crash that hit the market on August 22.
What is driving the bitcoin rally?
The move was fueled by roughly $1.14 billion in short liquidations, renewed spot bitcoin ETF demand, and regulatory momentum. Trump backed the CLARITY Act, and the CFTC signaled it will write crypto rules under existing authority if Congress stalls.
What is the CLARITY Act?
The CLARITY Act is a U.S. market structure bill that would set out when a digital asset is a commodity versus a security and assign oversight accordingly. It passed the House in 2025 and faces a Senate cloture vote scheduled for September 15, 2026.
