Bitcoin is back within striking distance of $80,000, and traders on Polymarket are increasingly betting that the cryptocurrency will reach the milestone before the end of August.
Polymarket’s Bitcoin market currently gives BTC a 59% chance of touching $80,000 this month, according to the prediction market. The odds have risen sharply as Bitcoin’s latest rally pushed the cryptocurrency above $77,000 and briefly close to $79,500.
The move marks a dramatic change in market sentiment. Bitcoin began August around the mid-$60,000s, meaning the latest rally has delivered gains of more than 20% in a matter of weeks. The cryptocurrency is now trading near its highest level since early summer, putting $80,000 back at the center of the market’s attention.
Polymarket traders are also assigning a 35% probability to Bitcoin reaching $82,500 and an 18% chance of touching $85,000 before the month ends. A move to $100,000, however, remains a long shot, with the odds at only 2%.
Bitcoin Traders Back $80,000 as Polymarket Odds Jump to 59%
Short squeeze fuels Bitcoin’s rebound
The speed of Bitcoin’s recovery has been one of the most notable features of the move.
Bitcoin climbed from roughly $64,000 to nearly $79,500 in just three days, triggering a major wave of short liquidations. More than $4 billion in bearish crypto positions were wiped out during the rally, according to market data cited in recent reports.
The mechanics of a short squeeze helped accelerate the move. Traders betting against Bitcoin were forced to buy the cryptocurrency back as prices moved higher, creating additional demand and pushing prices through successive resistance levels.
Once Bitcoin broke above $70,000 and then $75,000, momentum traders also began entering the market. The combination of short covering, fresh buying and improving sentiment helped turn what initially looked like a recovery into a much stronger rally.
But the same dynamic could now work in reverse.
After Bitcoin approached $80,000, traders who entered leveraged long positions began facing greater risks. A pullback toward $77,000 has already triggered hundreds of millions of dollars in crypto liquidations, shifting some of the pressure from short sellers to overextended buyers.
That makes the area around 79,000-80,000 particularly important. A clean breakout could attract another wave of momentum buying, while another rejection could encourage traders to lock in profits.
Bitcoin (BTC) Price Performance on Aug 23, 2026 (Source: CoinMarketCap)
ETF demand provides a second source of support
Unlike previous rallies driven primarily by derivatives activity, Bitcoin’s latest advance has also been accompanied by strong demand for U.S. spot Bitcoin ETFs.
The funds attracted $606 million in net inflows on Thursday, their largest single-day inflow since May. From Monday through Thursday, spot Bitcoin ETFs recorded about $1.6 billion in combined inflows, signaling renewed institutional demand.
That momentum continued into Friday. U.S. spot Bitcoin ETFs recorded approximately $307.5 million in net inflows on August 21, extending their positive streak to five consecutive trading sessions. BlackRock’s IBIT led the group with roughly $239.3 million of inflows, while Fidelity’s FBTC added about $30.2 million.
The ETF flows are significant because they provide a more direct indication of demand from investors seeking regulated exposure to Bitcoin.
If Bitcoin were rising while ETF investors were simultaneously withdrawing money, the rally would look considerably less convincing. Instead, institutional flows have strengthened alongside the price, giving bulls another argument for a move above $80,000.
Treasury policy adds to the bullish backdrop
Macroeconomic developments have also helped Bitcoin.
The U.S. Treasury recently announced plans to increase its buybacks of longer-dated government bonds, a move that initially helped ease pressure in the Treasury market and weakened the dollar. Investors interpreted the announcement as potentially supportive for scarce assets such as Bitcoin and gold.
The rally also came alongside renewed optimism over U.S. cryptocurrency regulation. President Donald Trump has pushed Congress to advance the CLARITY Act, which is designed to establish a clearer regulatory framework for digital assets. Recent political and regulatory developments have added another layer of support to crypto sentiment.
Still, the macro picture is not entirely risk-free. Long-term Treasury yields remain elevated, and investors continue to watch the Federal Reserve closely for clues about interest rates and financial conditions.
The upcoming Jackson Hole gathering could therefore become an important test for risk assets. Any signal that monetary policy may remain restrictive for longer could limit Bitcoin’s upside, particularly after such a rapid rally.
Can Bitcoin actually break $80,000?
For now, the market is leaning bullish, but reaching $80,000 and holding above it are two different challenges.
Bitcoin’s recent rise has been powerful enough to restore momentum, but it has also created conditions for profit-taking. Traders who bought near $64,000 or $70,000 now have substantial unrealized gains, while leveraged buyers are increasingly vulnerable to sharp reversals.
The weekend could add another layer of volatility. Bitcoin trades 24 hours a day, but U.S. spot ETFs do not trade when traditional markets are closed. With one major source of institutional demand temporarily offline, relatively modest orders can have a larger impact on price in thinner weekend liquidity.
That means the first full U.S. trading sessions of next week could be particularly revealing. If ETF inflows remain strong and Bitcoin can reclaim $80,000 with sustained volume, traders may begin targeting the 82,500-85,000 range.
For now, Polymarket’s 59% probability suggests traders believe an $80,000 test is more likely than not. But with Bitcoin already up more than 20% in a short period, the path higher is unlikely to be straightforward.
The immediate battle is no longer whether Bitcoin can recover from the mid-$60,000s. It is whether bulls can turn $80,000 from a psychological ceiling into a new support level.
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