Why Is The Crypto Market Up Today?

The total cryptocurrency market capitalization hovered around $2.66 trillion on Tuesday, August 25, after an upward move that started on August 14 and solidified on August 18. The rally is being driven primarily by short squeezes, while long liquidations are beginning to rise, adding risk to the upside.

Market‑cap resistance and support levels

The market cap has stalled three times since August 22 at the $2.67 trillion level, which aligns with the 0.236 Fibonacci retracement. A daily close above this resistance could open pathways toward $2.75 trillion and $2.88 trillion. Conversely, a break below the $2.54 trillion floor would trigger a double‑top pattern, suggesting a potential 5.29 % decline toward $2.40 trillion.

Short squeezes and emerging long liquidations

Short positions continue to be forced out, with $216 million liquidated in a 24‑hour period, according to Coinglass data. At the same time, long positions are also being liquidated, amounting to $191 million over the same timeframe, indicating increasing market risk.

Macro backdrop: US Treasury bond buybacks

On August 19, the US Treasury announced it would double its bond buyback program to $4 billion, a move intended to lower 10‑year Treasury yields and encourage risk‑on assets such as crypto. The timing of these buybacks, slated to begin on September 9, is a key factor for future market sentiment.

Bitcoin ETF activity

Call option volume on the largest Bitcoin ETF (IBIT) surged to 1.58 million contracts, marking the highest daily volume on record and reflecting strong bullish positioning among investors.

Monero (XMR) performance

Monero rose 5.7 % on Tuesday and 21 % over the past 30 days, trading near $444. A close above $463 could open targets at $494 and $544, while a drop below $444 would expose a floor near $413.

Outlook

The rally’s reliance on short‑covering rather than fresh buying suggests heightened vulnerability. The most immediate risk is a failure to maintain the $2.54 trillion support level before the Treasury buybacks commence, which could validate the double‑top downside scenario.