Crypto Rally
Bitcoin (BTC) trades near $72,500, up about 11% this week. This is the first time it has been above 70,000 since early June. It broke through the 100-day and 200-day trading averages. The last time it held above its 200-day average was in October, when it traded well above $100,000.
Ethereum (ETH) did even better, up about 20% and trading around 2,300 after being stuck near 1,800. It too sits above its technical averages. These averages are long-term trend markers, and a price break above them counts as a bullish signal. The hope is these prices hold above the moving averages going forward.
XRP (Ripple) rose about 15% this week. Hyperliquid's native token, Hype (HYPE), jumped about 25% in one day after President Trump said the CFTC is working to bring its perpetual futures trading product to the US market.
Regulation: The Clarity Act
The Clarity Act is on the agenda for September 15. Representative Thune has been pushing it, and both parties now look closer and more likely to pass it. Markets have wanted certainty on crypto rules for a while, and movement on it is expected to be a positive catalyst.
At a White House crypto summit, executives from Coinbase (COIN), Blockchain, and others met. Trump repeated that he wants the act passed and wants the Senate to take it up in mid-September.
There is a plan B if the Clarity Act stalls. CFTC head Michael Selig gave comments suggesting the agency would step up and set another set of guardrails. These would be rules rather than laws, but they would still add clarity.
Trading Flows and the Short Squeeze
Institutional demand surged. US spot Bitcoin ETFs crossed $1 billion in inflows over three days, with spot flows above $500 million in a single day.
A record short squeeze hit the market. About $2.7 billion in shorts were caught, the largest squeeze since 2021. There was a big short wall around 70,000, flagged by the head of crypto Jim Feroli. Over $1 billion in shorts were liquidated in one hour on Wednesday, driving more short covering. A Treasury move into the bond market also helped risk assets like crypto.
Future Catalysts
A government mandate to buy from a National Reserve is one possible catalyst. Another is Jackson Hole - what the Fed says after that meeting about rate policy could push the market either way.
IPO season is a factor too. When SpaceX went public, the crypto market dipped, on the idea that similar investors rotated out of crypto to buy SpaceX. Anthropic could go public this fall, and breaking news says Anthropic expects to match or top SpaceX's record IPO size, which could pull money out of crypto. OpenAI is looking at 2027 or possibly sooner.
