Weekly Market Digest — Week of August 17, 2026

WEEKLY MARKET DIGEST • August 17 – August 24, 2026

TLDR

• Bitcoin surged 21.62% to $77,263.
• 10y yield rose 15bp on US debt crisis concerns.
• $2.07 billion flowed into Bitcoin ETFs in August.
• VIX fell 0.06pp to 15.13 on relatively calm markets.
• Watch $68,143 BTC support level next week.

Weekly Market Performance

Macro Highlights

The dollar index fell 0.84% on the week to 98.80, changing the risk picture as gold rose 4.67% to $4,624.10. The decline in the dollar index also coincided with a rise in WTI crude to $87.06, up 3.03% on the week.

The US-Canada trade war has escalated with the imposition of 50% tariffs on about $20 billion of Canadian goods and a pledge from Prime Minister Mark Carney to retaliate, with counter-tariffs set to start on September 8.

(CNBC) (Bloomberg) (Financial Times)

The US is preparing a new campaign of economic pressure on Iran, with the announcement of new sanctions and a naval blockade and US President Donald Trump warning countries against maintaining trade ties, and Iran has threatened to seize ships in response.

(CNBC) (Bloomberg)

The 30-year Treasury yield topped 5.31%, the highest in 19 years, on inflation and spending concerns, and then fell to 5.28% by the week's end.

(CNBC)

Week ahead

• Tue Aug 25: New Residential Construction.
• Wed Aug 26: Gross Domestic Product.
• Thu Aug 27: Advance Economic Indicators.
• Tue Sep 01: Job Openings and Labor Turnover Survey.

Crypto Highlights

Term Finance has lost an estimated $8.5 million in a vault governance exploit, resulting in the permanent closure of its Meta Vaults after an attack removed nearly all of their Ethereum deposits.

The US Securities and Exchange Commission (SEC) has proposed new crypto rules, which would provide companies with a safe harbor from tokens being treated as “investment contracts” and certain exemptions for token issuance, in the absence of the CLARITY Act.

Bitcoin experienced a 23% rally, potentially marking the beginning of a new cycle, fueled by debt-related issues and concerns over a potential US debt crisis, which could occur within three years, according to Ray Dalio.

Banks and regulators from Abu Dhabi, Bhutan, and Malta have joined a quantum-resistant crypto transfer pilot, where participating banks will test post-quantum wallets and on-chain transfers, while regulators initially observe the process.

US Spot ETF Flows

Spot ETF Daily Flows — BTC, ETH & SOL

Cost Basis Distribution & Liquidation Exposure

BTC

ANALYST INTERPRETATION — BTC

1. Positioning & Derivatives Read

The data indicates that $153M of BTC perp longs were liquidated, while $1302M of BTC perp shorts were liquidated, resulting in a week-end long/short ratio of 1.43. This suggests that shorts were more heavily impacted, with a significant amount of capital being taken out of the market. The ETF flow direction and magnitude show a weekly net flow of $+1758M into BTC, indicating continued investor interest. Given the liquidation data and ETF flows, the market appears to be over-extended to the upside, with longs more exposed going into next week.

2. Key Risks & Levels for Next Week

Long Liquidation Risk: The largest cost basis cluster below BTC spot sits at $68,143 with 267827.23 BTC, and a breach of this level would push a significant amount of open longs underwater, increasing the likelihood of accelerated liquidations. Watch for BTC spot volume accelerating on the way down as the tell that this risk is playing out.

Short Squeeze Risk: A move above $87,500 would put $79.2M of short positions at risk of liquidation, potentially triggering a short squeeze. If BTC spot price approaches this level, monitor the options skew for signs of increased hedging activity, which would indicate that traders are preparing for a potential squeeze.

Support Break Risk: The $67,452 level, with 381694.25 BTC in supply, is a critical support level for BTC. If this level is breached, watch for an increase in perp long liquidations, as well as a potential shift in ETF flow direction, which would confirm that the support break is gaining momentum.

ETH

ANALYST INTERPRETATION — ETH

1. Positioning & Derivatives Read

ETH perp longs were liquidated to the tune of $153M, while ETH perp shorts were liquidated for $1302M, indicating a significant reduction in short exposure. The long/short ratio ended the week at 1.43, suggesting that longs are still more exposed. With the largest cost basis cluster below ETH spot sitting at $2,377, a breach of this level would push $1.4B in open longs underwater and into the highest liquidation exposure band. Given the significant short covering, the market is under-extended on the short side, while longs remain more exposed going into next week.

2. Key Risks & Levels for Next Week

Long Liquidation Risk: The largest cost basis cluster below ETH spot sits at $2,377 with 1,405,416.74 ETH, and a breach of this level would push $1.4B in open longs underwater and into the highest liquidation exposure band. Watch for ETH spot volume accelerating on the way down, not after, as this would be the tell that long liquidation is gaining momentum.

Short Squeeze Risk: A move above $2,700 would trigger a short squeeze, with $31.3M in short exposure at this level. If ETH spot price starts to trade above $2,700, monitor the ETH options skew for a shift towards more call buying, indicating increasing speculation of further upside.

Support Break Risk: A break below $2,280 would expose a significant supply cluster, with 1,621,882.19 ETH at this level. Monitor ETH ETF flow direction for any signs of outflows, as this would indicate a loss of investor confidence and increase the likelihood of a support break.

On-Chain Signals — Bitcoin

Amber rows deviate >1.5σ from prior 4-week baseline • data as of 2026-08-23

Notable — MVRV Ratio: 14.9σ above 4-week baseline

Notable — NUPL: 12.5σ above 4-week baseline

MVRV Ratio and NUPL are 14.9σ and 12.5σ above baseline, indicating a late-cycle market. The 25Δ Put/Call Skew plummeted 121.5% to -2.7%.

Weekly Market Wrap

The US equity market experienced a relatively subdued week, with the S&P 500 declining 0.91% to 7,674.37, the Dow Jones slipping 0.34% to 53,277.01, and the Nasdaq falling 1.74% to 26,180.46. The 30-year Treasury yield surged to a 19-year high, while the VIX remained relatively stable, ending the week at 15.13, down 0.06 percentage points. The dollar index also saw a slight decline, ending the week at 98.80. These moves were largely driven by concerns over US-Iran tensions, elevated crude oil prices, and the upcoming release of FOMC minutes and US inflation data. The 10-year Treasury yield ended the week at a higher level, with a 10y +15bp move, reflecting the market's expectations of future interest rate hikes.

In crypto markets, the rally was driven by a combination of factors, including increased institutional investment, with Bitcoin ETFs drawing $608 million in inflows, and concerns over a potential US debt crisis. The total inflows for August reached $2.07 billion, a 2026 high. Regulatory developments also with the CFTC ordering a trading ban for former Alameda and FTX executives. On-chain signals were also positive, with Bitcoin's price breaking above its 200-day moving average for the first time since November. The rally lifted miners and treasury companies, including Canaan, Strive, and Metaplanet, with double-digit gains in crypto stocks. Additionally, the launch of new crypto exchanges, such as Nomura's Laser Digital, and the expansion of existing ones, like Capital.com, further supported the market.

Looking ahead to next week, several catalysts are likely to shape the markets. In macro, the release of the FOMC minutes and US inflation data will be closely watched, as they will provide insight into the Federal Reserve's future policy decisions. The 10-year Treasury yield is expected to remain volatile, with a potential 10y +10bp move. In crypto, the upcoming launch of the RISE program, which aims to distribute state benefits using the Canton Network, and the potential revision of the MiCA regulation to include crypto lending, will be key events to watch. Additionally, the expected expansion of crypto services by companies like Bitget and the growth of institutional investment in crypto assets will continue to drive the market.