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Bitcoin has staged a sharp recovery, breaking above $78,000 to reach its strongest level since May, as changing US policy signals, stronger institutional demand and renewed investor appetite drive a broad cryptocurrency rally.
The leading digital asset gained as much as 9.5% during the week and was trading around $77,500 in late New York trading. Bitcoin had risen roughly 23% for the week, putting it on track for its strongest weekly performance since March 2023.
Bitcoin Breaks Above Key Technical Level
The latest rally has pushed Bitcoin above its 200-day moving average for the first time since December 2025.
Market participants often monitor the 200-day average as an indicator of longer-term price direction. Bitcoin’s move above the level could therefore signal a potential shift after months of weakness, although it does not guarantee that the recovery will continue.
The cryptocurrency had previously fallen significantly from its 2025 record above $126,000, making the latest rebound particularly notable.
US Treasury Policy Sparks Risk Appetite
A major catalyst for the latest move came from the US Treasury.
Treasury Secretary Scott Bessent announced that the department would at least double the size of its planned long-term Treasury bond buybacks. The announcement helped push bond yields lower and contributed to renewed demand for riskier assets.
Bitcoin benefited from the resulting improvement in market sentiment, with the move also triggering the liquidation of billions of dollars in short positions and adding further momentum to the rally.
The development also coincided with a rise in gold prices as investors weighed concerns about the US dollar and the potential implications of intervention in the bond market.
Trump Renews Push for Crypto Legislation
Political developments in Washington have provided another boost to digital assets.
US President Donald Trump met with cryptocurrency industry executives, including representatives from Coinbase Global, in a move viewed by market participants as another indication of his administration’s supportive stance toward the sector.
Trump also urged the US Senate to advance the Clarity Act, legislation intended to establish clearer rules for the digital-asset market.
The bill, however, remained stalled amid partisan disagreements and was not brought to a vote before the Senate’s August recess.
Crypto industry participants argue that clearer regulation could reduce uncertainty and encourage greater institutional participation in digital assets.
Bitcoin ETFs Attract More Than $1bn
Institutional demand has also strengthened during the rally.
US-listed Bitcoin exchange-traded funds recorded their strongest inflows in six weeks, with more than $1 billion flowing into the 13 ETFs during the week.
The renewed ETF demand suggests that the latest price recovery is being supported not only by retail speculation but also by increased institutional interest in Bitcoin exposure.
Analysts Turn More Optimistic
The strength of the rebound has prompted some analysts to reassess their outlook.
Geoffrey Kendrick, global head of digital assets research at Standard Chartered, said the firm’s previous year-end Bitcoin estimate of $100,000 could prove conservative following the latest move.
However, the bank had earlier lowered its year-end Bitcoin target from $150,000 to $100,000 and anticipated that the cryptocurrency could first decline toward $50,000 before recovering.
That contrast highlights the uncertainty surrounding the asset’s outlook despite the current rally.
Volatility Remains a Key Risk
The rally has not eliminated the risks associated with Bitcoin’s price swings.
Rachael Lucas, an analyst at BTC Markets, attributed the recent move primarily to the Treasury’s bond-buyback announcement, which lowered long-term yields and improved broader risk appetite.
However, she cautioned that the development had not fundamentally changed Bitcoin’s long-term investment case or its characteristic volatility.
The Bigger Picture
Bitcoin’s surge above $78,000 marks a significant turnaround from the weakness that dominated much of 2026.
The combination of supportive US policy signals, stronger ETF inflows, falling bond yields and renewed institutional interest has created a favourable environment for cryptocurrencies.
Whether the rally develops into a sustained recovery will depend on whether those sources of demand persist and whether US policymakers deliver greater regulatory clarity.
For now, Bitcoin’s move above its 200-day average and back above $78,000 represents a significant technical and sentiment shift but the cryptocurrency’s history of sharp reversals means investors remain focused on whether the latest momentum can last.
