Bitcoin Rally Pauses After Jumping to Three-Month High — Update

By Jason Chau and Renae Dyer

Bitcoin eased on Tuesday after rising above $80,000 for the first time since May overnight as the cryptocurrency's rally stalled in the absence of new positive catalysts.

The cryptocurrency had reached a three-month high of $81,238 in Asia trade, according to LSEG data, reversing months of subdued valuations as fresh investor interest in the so-called debasement trade brought growing support for the cryptocurrency as a dollar hedge.

Bitcoin fell back below $80,000 later in the day, however, as it struggled to sustain the upward momentum seen since Treasury Secretary Scott Bessent said last week that the U.S. would increase buybacks of long-term debt. Bitcoin last traded at $79,044.

The Treasury announcement had triggered another round of dollar selling, with Bridgewater Associates founder Ray Dalio recommending in a blog post Friday that investors hold more bitcoin as a hedge against the risk of a looming debt crisis.

Bitcoin is facing an area of stiff resistance between $80,000-$82,000 so it could consolidate if profit-takers emerge in size, Trade Nation analyst David Morrison said in a note.

Along with the buyback announcement, bitcoin's recent gains were helped by President Trump urging lawmakers to pass the Clarity Act, which provides a framework for crypto regulation. The Senate is due to hold a procedural cloture vote on the bill on Sept. 15.

Whether the recent crypto rally has further to go looks uncertain and will depend on tangible regulatory progress following Trump's remarks, according to analysts.

"The current optimism could bleed out just as quickly as it appeared," said Vladimir Tikhomirov, co-founder of Algebra Finance.

Bitcoin's rebound also reflected broader unease over the direction of U.S. economic policymaking as the lines between monetary and fiscal policy blur, following Bessent's interventions and Federal Reserve Chairman Kevin Warsh's push to end the central bank's practice of forward guidance, DBS analysts said.

Amplifying the recent gains was a short squeeze, as traders who had bet on bitcoin's decline were forced to buy back their positions as prices surged. According to Bitfinex analysts, around $3 billion of short positions were liquidated over two days.

Meanwhile, trading activity in spot bitcoin exchange-traded funds has recovered strongly, with more than $500 million in inflows on Aug. 21 signaling a revival in institutional demand for the risk asset.

The broader crypto complex has also logged gains.Ethereum, the second most-traded cryptocurrency, and XRP both reached a six-month high of $2,545 and $1.697 respectively on Saturday.

Write to Jason Chau at jason.chau@wsj.com and Renae Dyer at renae.dyer@wsj.com

(END) Dow Jones Newswires

August 25, 2026 10:59 ET (14:59 GMT)