BlockBeats News, August 26th. K33 and Bitwise analysts stated that Bitcoin's record-breaking short squeeze, leverage reset, and the macro catalyst brought by the US Treasury Secretary Janet Yellen may indicate that the market is transitioning to a broader bull market reset. Bitcoin has surged 23% in the past week, marking its strongest single-week performance since November 2024 post the US election; spot and perpetual contract trading volume increased by 188%, CME trading volume rose by 152%, and Bitcoin investment products saw a net inflow of 31,740 BTC.

K33 Research Director Vetle Lunde pointed out that on August 19th, a total of $1.37 billion worth of Bitcoin shorts were liquidated, nearly double the previous single-day record of $757 million in July 2021, and another $739 million shorts were liquidated on August 21st. Subsequently, the open interest in perpetual contracts dropped to 284,000 BTC, the lowest since May, with the funding rate returning to neutral. Historically, large-scale short squeezes have often occurred during Bitcoin's bottoming phases.

Other indicators have also shifted in sync. Bitcoin's six-month 25 Delta options skew turned negative for the first time since September 2025, indicating that the price of bullish options is higher than bearish options, ending an 11-month streak where the market paid a premium for downside protection. Bitcoin also reclaimed the 50-day, 100-day, 200-day, and 200-week moving averages within four days, faster than in any previous cycle; such a quick recovery of these averages within 45 days has only been seen in October 2015, April 2020, and October 2023, all near the beginning of cyclical bull markets.

Yellen's push to increase long-term US Treasury bond repurchases is also seen as an additional catalyst. Bitcoin's 90-day correlation with gold rose to 0.52, the highest since October 2020; while its correlation with the Nasdaq dropped to 0.38, marking a one-year low. Bitwise Chief Investment Officer Matt Hougan believes that as the global financial system is increasingly used as a geopolitical tool, a neutral currency network independent of a single national banking system and globally transferable will be more valuable.