**[Analyst: Bitcoin's Current Rally Goes Beyond Short Squeeze, Spot and ETF Demand Improving]** BlockBeats News, August 21: Bitcoin surged past $73,000, marking its first time above this level since June. The day prior, the crypto market saw a record-breaking $2.75 billion in Bitcoin short positions liquidated, with the short squeeze further accelerating the rally. Analysts suggest that this rally is not solely driven by short covering; spot and ETF demand are improving, while the decline in U.S. long-term Treasury yields and a clearer crypto regulatory environment are also supporting the rebound. STS Digital Co-founder Gideon Hyams stated that while a short squeeze can initiate a rally, it is unlikely to sustain the trend on its own. The current surge is also backed by factors such as ETF fund inflows, declining long-term yields, and a more defined U.S. crypto regulatory framework. The key for the market lies in whether Bitcoin can hold above the consolidation range formed since June. Nansen Senior Research Analyst Nicolai Søndergaard believes that while short covering accelerated the breakout, it is not the sole driver of the rally. Bitcoin's technical outlook has improved, supported by stronger spot and ETF demand. However, with the short squeeze largely over and leveraged long positions increasing, Bitcoin's ability to sustain above $70,000 will depend on whether spot buying can continue. CryptoQuant Founder Ki Young Ju noted that Bitcoin spot and perpetual contract demand simultaneously turned positive for the first time since the historical peak in October 2025. He believes that while the current demand scale remains small, if this trend persists for a month, it could reasonably signal the end of the bear market and the start of a new bull cycle. Meanwhile, market activity has noticeably picked up. Wincent Senior Director Paul Howard stated that trading volume over the past 24 hours has grown approximately fivefold compared to the annual low reached last weekend. Previously, the market was in a low-volatility, low-liquidity environment, where any positive news could be amplified and lead to significant price swings. As of press time, Bitcoin is trading at approximately $73,300. Analysts believe that "$70,000 is a critical support level for this rally. If it can hold, the trend may evolve into a sustained upward movement; if it falls back to the $69,700–$69,000 range, it may simply be a normal retest of the breakout." [Original Link]