Cryptocurrency increases to $122K, causing extensive short sale terminations
Bitcoin's Record-Breaking Rally Continues
The digital currency Bitcoin has been on a remarkable bull run, with prolonged gains pushing prices to new record peaks. This surge is the result of a combination of strong institutional inflows, speculative market dynamics, and a favorable macro environment.
Institutional Demand and ETF Inflows
Significant institutional buying has been a key driver of the rally. Major purchases of Bitcoin via exchange-traded products (ETPs) and Digital Asset Treasuries have added tens of thousands of BTC in July 2025, contributing to a strong foundation for price gains. Notable institutions like VanEck forecast Bitcoin reaching $180,000 by the end of 2025, reinforcing market confidence.
Short Squeezes and Futures Market Dynamics
Elevated CME basis funding rates reached 9% in August 2025—the highest since February 2025—indicating strong speculative appetite and possible short squeezes as short sellers cover positions, driving prices upward.
Macroeconomic and Regulatory Environment
The U.S. Senate passing the GENIUS Act clarifies regulatory frameworks around stablecoins, enhancing investor confidence in the crypto sector. U.S. government actions, such as the creation of a Strategic Bitcoin Reserve and digital asset stockpile, provide institutional legitimacy and serve as bullish signals. Optimism about an imminent Federal Reserve interest rate cut reduces borrowing costs and generally supports risk assets like Bitcoin.
Improving Investor Sentiment and Declining Exchange Balances
Analysts note declining Bitcoin balances on exchanges, implying less selling pressure and more holding behavior among investors, which is a bullish sign.
Volatility Considerations
Despite the bullish setup, short-term volatility remains as large holders (“whales”) occasionally move coins and futures sell pressure increases, but these events have historically preceded stronger momentum surges.
Record Breaking Prices
Bitcoin reached 122,000 this morning, marking one of the hardest rallies of the year. Wholesalers are monitoring a potential correction to the $120,000 support for Bitcoin. An upside break of the $123,000 resistance may aim for $125,000. Liquidation risk is high in leveraged markets for Bitcoin.
Looking Ahead
The main resistance Bitcoin is facing is at $123,000. The addition of rate-cut expectations from the Federal Reserve and mainstream access to Bitcoin due to ETF approvals favored the breakout. Analysts observed indications of a potential golden cross, suggesting further bullish movements. The sessions to come will determine whether the Bitcoin rally holds or not. The long-term trends in terms of institutional activity in the crypto market are ongoing.
The short squeeze was triggered by compulsory shutdowns that produced a ripple effect of purchase orders. The rally resulted in a sharp increase of about $117,000 to 122,000 on charts. The latest American policies promoted the use of cryptocurrency, contributing to the positive sentiment in the markets towards Bitcoin.
Trading activity for Bitcoin has been robust, with major institutions like VanEck investing heavily in the digital currency, predicting prices could reach $180,000 by the end of 2025, thereby strengthening market confidence. The futures market has also seen high short squeeze potential, as evident in the elevated CME basis funding rates in August 2025. The passing of the GENIUS Act in the U.S. Senate has further improved the regulatory environment for cryptocurrencies, increasing investor confidence. The recent rally has pushed Bitcoin's price to record peaks of 122,000, but there remains a potential correction to the $120,000 support. Looking ahead, further bullish movements may be driven by indications of a potential golden cross and the upcoming sessions will determine the sustainability of the Bitcoin rally.
