Bitcoin’s 22% rally now needs real demand to outlast Treasury liquidity boost

Bitcoin’s latest breakout may have started with a shift in U.S. Treasury-market liquidity, but analysts say its staying power will depend on whether ETF inflows and spot demand can replace the initial macro boost. Summary Bitcoin’s recent 22% rally initially carried a macro signature as the Treasury’s expanded long-term bond buybacks pushed yields lower and revived debasement concerns. Sygnum CIO Fabian Dori said falling BTC-denominated open interest and contained funding suggest short covering helped fuel the breakout rather than leveraged longs alone. U.S. spot Bitcoin ETFs drew $1.92 billion during the breakout week, while continued inflows suggest crypto-native demand is beginning to support the move. DWF Labs’ Martin Lee said ETF flows, futures basis and Bitcoin’s pre-breakout range will show whether the rally has a durable structural bid ahead of Sept. 9. Both analysts said broader liquidity conditions, rather than the Fed’s policy rate alone, will be crucial as markets assess Warsh’s Jackson Hole message. Bitcoin surged roughly 22% during its breakout week as long-term Treasury yields fell and the dollar weakened following the U.S. Treasury’s decision to expand buybacks of l...