Bitcoin has jumped about 23 percent over the past week, showing its strongest upward momentum in three years.

On Aug. 24 (local time), blockchain media outlet U.Today reported that bitcoin broke above the key psychological level around $77,500 and is holding its price above major moving averages.

The rebound is being taken as a sign that it has reversed the weak trend that persisted throughout the first half of 2026. After declines in January and February, bitcoin fell 20.5 percent in June, deepening bearish sentiment across the market. A modest rebound in July turned into a sharp rise in August, taking its month-to-date return to 22.7 percent. That is an unusually large gain compared with bitcoin's average August return of 0.82 percent.

The market is focusing on the move as a result of breaking out of a range that had lasted for months. Crypto analyst Dr Profit said, "The price structure has changed in a direction favorable to buyers."

There are also assessments that key price levels have shifted. Dr Profit said $71,000, which had blocked gains, has now turned into a major support level. He cited $78,500 as the nearest intermediate target for bulls and said that if momentum holds above that area it could lead to a test of $82,000.

A short squeeze is cited as the direct driver of the surge. Traders betting on declines using leverage failed to respond to the sharp upside breakout, triggering a chain of stop-loss orders and leading to liquidations of short positions worth billions of dollars. The forced closing of sell positions is also said to have prompted additional buying, increasing upside momentum.

Institutional inflows also supported the rise. During the trading week from Aug. 17 to 21, spot bitcoin exchange-traded funds saw net inflows of $1.91 billion. On a daily basis, inflows peaked at $606.29 million last Thursday, lifting those funds' total net assets to $96.07 billion.

Still, there is caution about expectations that the market will continue in a straight-line rise. Around $80,000, a liquidity wall has formed as large sell orders cluster there, and it is being cited as the biggest obstacle to further gains. The view that large money is not immediately joining broad optimism is also adding weight to such caution. With bitcoin rising sharply ahead of other assets, some funds could rotate into Ethereum, the No. 2 cryptocurrency by market capitalization, and major altcoins, according to another view.

With bitcoin's rally continuing, the market's next focus is whether it can absorb resistance at $80,000 and where fund rotation spreads.