Bitcoin has staged a remarkable comeback this week, breaking through $79,500 on Friday before settling near $77,700. The world's largest cryptocurrency is up more than 25% since Monday, marking one of its most volatile stretches in recent memory.
The surge follows a prolonged period of stagnation. For six consecutive weeks, Bitcoin had traded in a narrow band between $62,000 and $66,000, having fallen more than 50% from its October 2025 all-time high of around $126,000. The token hit a low of roughly $57,600 in early July, and that persistent weakness encouraged many traders to build bearish positions.
When the price finally broke higher, those bets unwound with force. The resulting short squeeze amplified the rally, pushing Bitcoin to its best level in months. Ether and other digital assets also climbed on the same wave of positioning.
Washington's role in the rally
The move was not purely technical. The US Treasury doubled the size of its bond buybacks earlier in the week to calm a jittery bond market. When yields continued to rise, Treasury Secretary Scott Bessent pledged on Thursday to expand the program further. Easier financial conditions and a softer dollar tend to favor riskier assets like Bitcoin.
Regulatory signals also added fuel. On Tuesday, the US Securities and Exchange Commission filed a proposal called "Regulation Crypto Assets," which would offer lighter registration requirements for crypto issuers. The next day, President Donald Trump hosted Coinbase's Brian Armstrong, Ripple's Brad Garlinghouse, Gemini's Winklevoss twins, and other industry leaders at the White House. Trump urged Congress to pass the long-delayed Digital Asset Market CLARITY Act, a bill that would split oversight of digital assets between the SEC and the Commodity Futures Trading Commission.
The bill cleared the House last year but remains stalled in the Senate. It needs 60 votes to overcome a procedural hurdle on 15 September, and its fate is uncertain.
Hyperliquid catches the spotlight
One of the most striking moments of Wednesday's summit came when Trump said the CFTC was working to bring Hyperliquid, a decentralized derivatives exchange, onshore "in a fully compliant legal fashion." The regulator has not published a timeline, but the comment sent HYPE, Hyperliquid's native token, surging 25% within 24 hours. HYPE now trades around $74, up more than 30% since the remarks.
Hyperliquid, popular with perpetual futures traders, has become a proxy for how far Washington's warmer stance on crypto could extend. The exchange's potential move to the US would mark a significant shift for a platform built on decentralization.
The broader rally has also drawn attention to other jurisdictions. In Central Asia, Kazakhstan's crypto amnesty aims to lure digital assets back onshore, while Nigeria's crypto framework seeks to turn remittances into investment. These developments suggest that the regulatory landscape is shifting beyond the US.
For European investors, the question is whether the rally can sustain itself. The SEC's proposal and the CLARITY Act are still in flux, and the Senate vote on 15 September will be a key test. If the bill fails, the market could see a sharp reversal.
For now, the short squeeze has delivered a powerful reminder of how quickly sentiment can change in crypto. But with regulatory uncertainty still looming, the path ahead remains anything but clear.
