Weekly Market Digest — Week of August 24, 2026

WEEKLY MARKET DIGEST • August 24 – August 31, 2026

TLDR

• Nasdaq rose 1.63%
• VIX fell 1.42pp
• 10y yield rose 5bp
• Bitcoin longs liquidated $253M
• Dollar index traded around 99.6 on Monday after rising in the previous session

Weekly Market Performance

Macro Highlights

CPI 3.30% y/y Jul · Core CPI 2.47% y/y Jul · Core PCE 3.34% y/y Jul · Unemployment 4.10% Jul · Payrolls -23k m/m Jul · Real GDP 1.50% q/q Apr

The dollar index rose 0.71% on the week to around 99.6, driven by hawkish comments from Fed Chair Warsh's speech at Jackson Hole, which increased the odds of a September rate hike. This move suggests that the market is pricing in a higher likelihood of monetary policy tightening. The 5Y yield rose 7 bp on the week, outpacing the 10Y yield, which increased by 2 bp. The dollar's strength also weighed on gold, which fell 2.39% on the week.

(Bloomberg) (Nasdaq) (CNBC) (Financial Times)

US-Iran Conflict Escalates

The conflict between the US and Iran continues to escalate, with both sides exchanging attacks. The US Navy blockade slashed Iran's oil exports, and the US plans to sanction another bank in an effort to clamp down on Iran transactions. This led to a gain in oil prices as the US and Iran exchanged strikes.

(CNBC) (Bloomberg)

The US announced plans to hike Canada auto tariffs to 50%, and Canada unveiled retaliatory tariffs on about $20 billion of US goods. The trade fight shows few signs of easing, with no current negotiations and Canadian officials expecting serious talks may not resume until after the US midterm elections.

(Bloomberg) (CNBC) (The New York Times) (Financial Times)

Rising bond yields added tens of billions to G7 countries' debt costs, and the Treasury considered tapping the near $1 trillion Treasury General Account to fund bond buybacks.

(Financial Times) (CNBC)

Week ahead

• Tue Sep 01: Job Openings and Labor Turnover Survey: Lower-than-expected job openings, particularly if accompanied by weaker labor-market details, would reinforce expectations for Fed easing, supporting lower yields and a weaker USD.
• Fri Sep 04: Employment Situation: Weaker-than-expected payrolls, especially alongside a higher unemployment rate/soft wages, would strengthen the Fed-cut narrative, likely weighing on USD and yields and supporting gold.
• Thu Sep 10: Producer Price Index: Higher-than-expected PPI, particularly core/services PPI, would reinforce inflation concerns, potentially pushing yields and USD higher and reducing near-term easing expectations.

Crypto Highlights

US spot Bitcoin ETFs experienced their strongest weekly inflow since October 2025, attracting $1.92 billion last week, as Bitcoin briefly climbed above $78,000 on Friday.

Russia's largest bank, Sber, plans to accept USDT, Ether, and Bitcoin as loan collateral, as the country introduces regulated crypto trading under a new law.

Stellar's real-world asset market has experienced significant growth, with its tokenized RWA market expanding to nearly $4 billion, more than quadrupling in size, driven by increasing institutional adoption and tokenization activity across the network.

Cronos has halted its network after a significant exploit involving Tectonic, which is estimated to have involved approximately $75 million, according to Crypto.com CEO Kris Marszalek.

Solana validators have approved a proposal to accelerate SOL disinflation, doubling the annual disinflation rate from 15% to 30%, which will reduce future SOL issuance while maintaining the long-term inflation target.

US Spot ETF Flows

Spot ETF Daily Flows — BTC, ETH & SOL

Cost Basis Distribution & Liquidation Exposure

BTC

ANALYST INTERPRETATION — BTC

1. Positioning & Derivatives Read

$253M of BTC perp longs were liquidated, while $203M of BTC perp shorts were liquidated, resulting in a long/short ratio of 2.17 at week-end. The ETF flow direction and magnitude indicate a weekly net flow of $+924M into BTC, suggesting buyers are still active. Given the liquidation exposure clusters in ON-CHAIN LEVELS, the market is over-extended to the upside, with more size stacked near spot on the long side, and the largest cost basis cluster below BTC spot sits at $77,823 with 199,399.81 BTC. This exposure leaves longs more vulnerable to a downturn, particularly if BTC spot price were to breach the $77,823 level.

2. Key Risks & Levels for Next Week

Long Liquidation Risk: The largest cost basis cluster below BTC spot sits at $77,823 with 199,399.81 BTC. A breach pushes $1.5B in open longs underwater and into the highest liquidation exposure band in the heatmap. Watch for BTC spot volume accelerating on the way down, not after — that's the tell.

Short Squeeze Risk: A push above $86,800 would put $58.6M of short positions at risk of liquidation, potentially accelerating a BTC price move upwards. Monitor the BTC options skew for signs of shifting sentiment, as a decrease in put skew could indicate increasing bullishness.

Support Break Risk: A drop below $68,143 would expose 225,651.46 BTC in supply at cost basis, potentially leading to a cascade of selling pressure on BTC. Track the direction and magnitude of ETF flows for signs of weakening buyer conviction, as a reversal in flow direction could confirm a breakdown in BTC support.

ETH

ANALYST INTERPRETATION — ETH

1. Positioning & Derivatives Read

The ETF flow direction and magnitude indicate a weekly net flow of $824M into ETH, with a cumulative flow of $13.0B and AUM of $15.2B, suggesting a bullish sentiment. The long/short ratio of 2.17 at week-end indicates that longs outnumber shorts, with $253M of ETH perp longs liquidated and $203M of ETH perp shorts liquidated. The liquidation exposure clusters in ON-CHAIN LEVELS show that there is more size stacked near spot on the long side, with a large cost basis cluster at $2,392. Given the current ETH spot price, the market is over-extended on the long side, with longs 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 $2,392 with 1,319,519.52 ETH, and a breach of this level would push $120.7M in open longs underwater and into the highest liquidation exposure band in the heatmap. Watch for ETH spot volume accelerating on the way down, not after, as this would be the tell that the risk is playing out.

Short Squeeze Risk: The largest short squeeze level above ETH spot is at $2,840 with $36.2M in potential short squeeze, and a move above this level would put pressure on shorts to cover, accelerating the move upwards. Monitor ETH options skew shifting as a sign that the market is pricing in a higher probability of a short squeeze.

Support Break Risk: A break of the $2,296 support level, where 1,575,670.62 ETH are held at cost basis, would open up a path to $2,137, with $76.4M in potential long liquidation. Look for an increase in ETH perp liquidations as a sign that the support break is gaining momentum.

On-Chain Signals — Bitcoin

Amber rows deviate >1.5σ from prior 4-week baseline • data as of 2026-08-30

Notable — NUPL: 2.6σ above 4-week baseline

Notable — MVRV Ratio: 2.5σ above 4-week baseline

Weekly Market Wrap

The macroeconomic landscape was marked by significant developments, including the US trade war with Canada and the unveiling of the Trump administration's plan to isolate Iran's economy. The potential use of the Treasury's $1 trillion General Account to fund bond buybacks also supported markets, as it would provide the Treasury with considerable firepower to influence long-term bond yields. The dollar index rose by 0.54% to 99.70. The yield on the 10-year Treasury note rose by 5 basis points to 4.23%, while the 2-year Treasury yield rose by 3 basis points to 4.51%. The price of gold hit a three-month high, rising by 2.15%, as investors sought safe-haven assets amid the escalating trade tensions.

In the crypto markets, Bitcoin rose by 0.84% to $77,913, while Ethereum fell by 0.44% to $2,438. The week was marked by significant developments, including the implementation of new quantum defenses by Bitcoin and the cancellation of 18.9 million SOL by Solana to curb inflation. The Cronos network was halted after a $75 million exploit, and the BIS chief expressed concerns over the credibility of stablecoins for payments at scale. The Bitcoin ETFs posted $201.8 million in net outflows on Friday, as BTC dipped below $78,000. The Solana validators approved a proposal to double the annual disinflation rate to 30%, reducing future SOL issuance. The price of Bitcoin dipped to $78,400 after Fed Chair Kevin Warsh's Jackson Hole speech downplayed softer US inflation prints, but rebounded to $80,000, lifting crypto stocks for companies like Circle and Solana.

Looking ahead to next week, key catalysts include the release of the US non-farm payroll data, which is expected to provide insight into the state of the US labor market. The European Central Bank's interest rate decision will also be closely watched, as it will provide guidance on the future direction of monetary policy in the eurozone. In the crypto space, the implementation of the SHRINCS signature scheme to upgrade Bitcoin to quantum security will be a significant development, as it will provide a more secure and reliable way of conducting transactions. Additionally, the potential launch of new crypto products and services, such as the Bitcoin-backed mortgages offered by Better and Coinbase, will be closely watched by investors and traders.

Sector Rotations