Nine days ago I laid out a case for a short-term ABC correction targeting roughly $61,000, with $62,662 as the level to watch for confirmation. I said I'd grade my own calls in this series, so let's start there before getting to the more interesting part: what happened after.
Grading the $61K Call
On August 14, Bitcoin slid to an intraday low of $62,470 as sellers tested the $63K floor for the second time in a week. That's not $61,000. It's not even the $62,662 support break I flagged as the trigger. But it's close enough that I'm going to take the win with a straight face rather than pretend I threaded the needle — I called a specific number, the market printed something $1,470 away from it three days later, and I'm not about to act like that's a coincidence. Close enough for government work, as they say — which, given what happened next, turned out to be a more literal joke than I meant it as.
Because here's the part the ABC pattern didn't see coming: Bitcoin didn't grind sideways in the low $60Ks the way a textbook bottom usually does. It reversed hard, and it hasn't really stopped since.
The Move From $62,470 to $73K
After bottoming on the 14th, Bitcoin spent a few days consolidating — flat near $63,500 on the 17th, still inside the same range that had held since early July. Then on August 20 — yesterday, as I'm writing this — the range broke, and it broke up violently. Bitcoin tore through $69,000, then $71,000, then $72,000, and touched $73,000 before pulling back slightly. That's roughly a 15%+ move off the August 14 low in a matter of days — the kind of move that doesn't happen without a real catalyst behind it, and this one had several stacked on top of each other:
- A Treasury liquidity move: the U.S. Treasury expanded the size of its buyback operations for longer-dated government securities, raising the maximum size of each operation from $2 billion to at least $4 billion — a liquidity signal risk assets read as bullish.
- A White House meeting: President Trump met with crypto industry executives — including leadership from Coinbase, Payward, and Blockchain.com — and reportedly raised the idea of the federal government purchasing a "significant amount" of Bitcoin, while pushing Congress to pass the CLARITY Act ahead of its September 15 deadline.
- A record short squeeze: roughly $2.7 billion in short positions were liquidated — the largest liquidation event on record since tracking began in 2021. That's forced buying, not just enthusiasm; traders who bet against this move were compelled to close those positions by buying back in, which added real fuel on top of the initial move.
Three real, reportable events, not a single meme-driven pump. That matters for how much weight I put on the move holding up versus round-tripping back down — a rally built on actual news tends to hold better than one built on nothing, though "tends to" is doing real work in that sentence, and the technical picture below is more cautious than the headlines.
Worth being precise about what a short squeeze actually is, because it changes how I read the move's durability. Traders who had bet on Bitcoin falling further — short positions — get forced to buy back in as the price rises against them, and that forced buying pushes price up further, which triggers more forced buying, and so on. It's genuinely self-reinforcing on the way up, which is exactly why $2.7 billion liquidating in a short window produced a move this size this fast. The catch is that a squeeze-driven leg isn't the same as organic demand showing up gradually — once the shorts are cleared out, that specific fuel source is gone, and whatever comes next has to be carried by the Treasury and White House catalysts actually mattering on their own, or by real buyers stepping in at these higher prices. The CLARITY Act piece is the one I'd watch closest for exactly this reason: if it passes by September 15 as pushed, that's a fresh, independent catalyst; if the deadline slips or the bill stalls, a move that was partly priced on the expectation of it passing has real room to give some of this week back.
What the RSI Actually Says — and What It Doesn't Yet
Zoom out to the bigger structure, because this is where I want to be careful not to get carried away by a single green week. Bitcoin's weekly RSI hit one of its most oversold readings on record back in February, and price rallied to roughly $80,000 by May off that setup. From there, Bitcoin corrected hard into June and July — and on that decline, price made a lower low while weekly RSI made a higher low. That's a textbook bullish divergence, and it's shown up independently in multiple places this year, not just in my own read of the chart.
Here's the honest caveat, though: a divergence forming is not the same as a divergence confirmed. As of this week, weekly RSI is still sitting in roughly the 41–48 range — below or near the midpoint — meaning it hasn't closed back above where it was sitting at the May high. Until it does, I'm treating this as a divergence in progress, not a confirmed trend reversal. The bigger structural bull case needs that reclaim to actually happen on a weekly close, not just an assumption that it will.
Meanwhile, the shorter-term picture is flashing the opposite warning: daily RSI is sitting deep in overbought territory, in the high-70s to low-80s depending on the source. A move this fast, this overbought, immediately following the largest short squeeze since 2021, is exactly the kind of setup that tends to cool off before it continues — not because the move is fake, but because vertical moves on forced buying rarely go in a straight line from here.
The Two-Sided Case
Bull case: the catalysts behind this move are real government and market-structure events, not hype — a Treasury liquidity signal, an administration publicly floating a federal BTC purchase, real legislative pressure via the CLARITY Act deadline, and a short squeeze large enough to have forced real capital back into the market. Layer that on top of a weekly divergence that multiple independent sources have flagged since mid-year, and the bottom case from my last post looks more right than wrong.
Bear case: daily RSI is overbought enough that a pullback wouldn't just be normal, it would be expected. The weekly RSI still hasn't confirmed anything — it's still below where it sat in May, which means the bigger-picture bull case remains a thesis, not a fact. And a 15% move in days, even on real catalysts, is the kind of move that frequently gives back a third to half of itself before it decides what it actually wants to do next.
What Would Actually Confirm This
- A weekly close where RSI reclaims the level it was at during the May high — this is the one piece that's still missing, and the one I'd weight most heavily.
- Holding above $69,000 on any retest — old resistance becoming new support is the standard tell that a breakout is real rather than a spike.
- A fast round-trip back under $65,000 would say this was a short-squeeze spike riding on news, not a structural shift — back to the same range we spent July and early August in.
- Whether the CLARITY Act actually passes by September 15 — a real catalyst if it happens, and a real risk of "sell the news" if it doesn't, given how much of this week's move was built on the expectation.
Today: It Kept Going
That $73K high was yesterday's number. Today, Bitcoin has pushed further still — opening the morning near $76,700, extending through $78,000, and tapping $79,000 at the time of this writing, putting the week's gain at roughly 20%, its biggest weekly move since March 2024. Another wave of forced buying did it: more than $3 billion in shorts were liquidated in 24 hours, spot Bitcoin ETFs pulled in $606 million on August 20 alone (the biggest daily inflow since May 1), and the Treasury's buyback expansion now has a specific start date — September 9. The daily-overbought caution I flagged above hasn't stopped this yet; the market's now testing $80,000 directly, with thinner weekend liquidity flagged as the next real risk factor. I'm not changing my read because of it — the weekly RSI still hasn't closed back above where it sat at the May high, so I'm still calling the bigger-picture divergence unconfirmed even as the short-term move keeps running hotter than I expected it to.
My Take
I'll take the $62,470 print as validation of the bottom-zone call, jokes about precision aside. But I'm not going to pretend the move to $73K was something my ABC pattern predicted, because it wasn't — that pattern called a bottom, not a 15% vertical breakout on a record short squeeze. Those are two different claims, and conflating them would be exactly the kind of overconfidence I try to avoid in this series. The weekly divergence is real and multi-sourced, but it's still unconfirmed by its own definition until RSI actually reclaims the May level, and daily RSI this overbought after a squeeze this large is not a place I'd be adding aggressively. Same discipline as always: still dollar-cost averaging on a fixed schedule, still unleveraged, still not chasing green candles because they feel good. With price now testing $80,000, a pullback toward yesterday's $73K breakout level and holding there would be healthy — that's old resistance becoming new support, exactly what you want to see. A fast round-trip back under $69,000 would be the more serious tell that this ran too far too fast.
Disclaimer: This post reflects my personal opinions and is not financial advice. Always do your own research and consult a financial advisor before making investment decisions. Cryptocurrency is extremely volatile and you can lose money.