Bitcoin climbed above $79,000 this week, reaching a three-month high and setting the cryptocurrency on course for its strongest weekly gain in more than two years. The move followed a prolonged slump that had pushed prices well below recent peaks.
The rally was driven in part by a short squeeze, as traders who had bet against the token were forced to buy back positions. Inflows into spot bitcoin exchange-traded funds also rose sharply during the week, adding demand as institutional buyers returned to the market.
The rebound follows a stretch of weakness earlier in the year, when bitcoin fell under $80,000 amid thin liquidity and concerns over Federal Reserve policy. The latest gains have recovered much of that lost ground.
Regulatory developments added to the week’s momentum. The U.S. Commodity Futures Trading Commission is examining a framework for crypto oversight, a step market participants view as a move toward clearer rules for digital assets.
Analysts remain divided on what the surge means. One market watcher cautioned investors against trying to call a bottom, warning that attempting to time the low point of a volatile asset carries risk even after a sharp rebound.
Bitcoin has a long record of large swings in both directions. Weekly gains of this scale have preceded both extended rallies and swift reversals, making the current move difficult to read as a definitive turning point.
Movement in U.S. Treasury bonds and broader risk sentiment also shaped trading, as investors weighed the outlook for interest rates against demand for higher-risk assets. Crypto-linked equities tracked the token higher during the week.
Traders will watch whether ETF inflows hold and whether the CFTC advances its rule-making in the coming weeks, both seen as tests of whether the recovery can extend into a longer upswing.