Weekly Market Digest — Week of August 31, 2026

WEEKLY MARKET DIGEST • August 31 – September 07, 2026

TLDR

• Bitcoin rose 2.30% to $79,706.
• $3.8 billion added to US Bitcoin ETFs.
• VIX fell 0.39pp to 14.53.
• 10y yield rose 3bp to 4.78%.
• Key test at $83,000 for Bitcoin.

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% Aug · Payrolls +162k m/m Aug · Real GDP 1.50% q/q Apr

The surge in crude oil prices, with WTI crude rising 6.67% on the week to $91.48, is the key development that will shape the market's trajectory going forward. This move has significant implications for inflation and the Fed's policy path, particularly given the already elevated core CPI at 2.47% y/y. As a result, the dollar index fell 0.27% on the week to 99.16, while the 10Y yield rose 3 bp to 4.78%.

US-Iran Conflict Escalates

The US commenced a second wave of attacks on Iran, leading to a surge in crude oil prices, and later struck three Iranian crude oil tankers, destroying one, in retaliation for the Islamic Revolutionary Guard Corps targeting two US Navy warships with ballistic missiles.

(Bloomberg) (CNBC) (Nasdaq)

Fed Rate Hike Odds Rise

Nonfarm payrolls rose 162,000 in August, exceeding expectations, and the unemployment rate held at 4.1%, leading to a rise in Treasury yields, with the 2-year yield reaching its highest level since January 2025. The strong jobs report, with average hourly earnings at $37.75 and a 3.1% y/y increase, has boosted expectations of a September rate hike.

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

Global Bond Yields Surge

The 10-year US Treasury yield hit its highest level since November 2023, and global bond yields climbed to the highest level in almost two decades, as rising oil prices fueled inflation concerns and investors ramped up expectations of a Fed rate hike.

(CNBC) (Bloomberg)

Venezuela Oil Deal

The US has gained greater control over Venezuela's oil sector, with a deal granting a US-backed oil firm 100-year concessions for 17 oil fields. The US detailed plans to exercise greater control over a private operator under the historic deal, including the first option to buy a significant share of Venezuela's crude production and veto power over the operator's board.

(Bloomberg) (CNBC)

Week ahead

• Tue Sep 08: G.19 Consumer Credit: a stronger-than-expected increase in consumer credit would suggest continued household borrowing and potentially resilient consumer demand. That could marginally support the view that economic activity remains strong.
• Thu Sep 10: Producer Price Index: a hotter-than-expected PPI/core PPI print would reinforce inflation concerns, increase expectations for a more hawkish Fed, and likely push Treasury yields higher, with the front end particularly sensitive and the 10Y/30Y potentially following.
• Fri Sep 11: Consumer Price Index: a cooler-than-expected August CPI, particularly core CPI, would reduce the probability of a September hike and could reopen the Fed cut trade, pushing Treasury yields lower. A hotter-than-expected print would reinforce expectations for a September hike and likely push yields higher.

Crypto Highlights

US spot Bitcoin ETFs experienced a significant surge in inflows, reaching $3.8 billion in the strongest three-week stretch of 2026, with nearly $1 billion added in the latest week, despite Bitcoin's price briefly dropping below $79,000.

Liquid Network has paused its operations after unidentified actors, claiming to be 'white hats', withdrew approximately $320 million in Bitcoin (BTC) from the network, with plans to return most of the 4,000 BTC once the Elements vulnerability is patched.

Harmony has proposed shutting down its layer-1 blockchain and migrating its native cryptocurrency, ONE, to Ethereum, following an exploit that led to plans to discard approximately 109,000 transactions.

Tether-backed Orionx has permanently closed after an audit discovered a $7 million custody gap, where more than $7 million in customer assets had been moved to wallets outside its custody.

Polish lawmakers have failed to overturn a presidential veto of crypto legislation, a decision that comes as the Zondacrypto scandal continues to widen, with its Estonian operator now entering bankruptcy.

US Spot ETF Flows

Spot ETF Daily Flows — BTC, ETH & SOL

Cost Basis Distribution & Liquidation Exposure

BTC

ANALYST INTERPRETATION — BTC

1. Positioning & Derivatives Read

$157M of BTC perp longs and $224M of BTC perp shorts were liquidated this week, a long/short liquidation ratio of 0.70: shorts took the larger hit. Thursday Sep 3 was the peak day at $161M, almost all of it shorts, and it coincided with the week's largest ETF inflow of $731M. Spot ETFs took in a net $987M over the week. Around spot at $80,366 the liquidation exposure is heavier above than below: $259M of shorts sits within 10% above spot against $185M of longs within 10% below. The short side is the more exposed going into next week, and the larger cascade risk is a rally, not a drop.

2. Key Risks & Levels for Next Week

Short Squeeze Risk: $51.2M of shorts sit at $87,500 and a further $55.4M at $88,200, with $59.4M more at $95,900. Reaching $87,500 first requires clearing the cost basis cluster at $80,589, where 298,182 BTC last changed hands, and the one at $86,120 holding 188,083 BTC. The tell is spot volume accelerating through $80,589 on the way up while ETF inflows hold positive.
Long Liquidation Risk: The nearest long cluster is $60.8M at $72,800, then $62.1M at $67,900. Between spot and $72,800 the cost basis cluster at $77,823, with 187,693 BTC, is the only support of size. Watch for spot volume accelerating as $77,823 is tested, not after, and for daily ETF flows turning negative as they did on Sep 1.
Deeper Support Risk: The largest cost basis cluster below spot is $67,452 with 346,935 BTC, and it sits just above the $67,900 liquidation level. Only 33.6% of supply is in profit at current prices, so a break there puts most remaining profitable holders underwater. A reversal in ETF flow direction while that level is tested would confirm the risk is playing out.

ETH

ANALYST INTERPRETATION — ETH

1. Positioning & Derivatives Read

$134M of ETH perp longs and $135M of ETH perp shorts were liquidated this week, a ratio of 0.99: the two sides were hit in roughly equal size. Thursday Sep 3 was the peak day at $66M, most of it shorts, on the same day ETH spot ETFs took in $141M of their $218M weekly net inflow. Around spot at $2,515 the exposure is lopsided: $174M of longs sits within 10% below spot against only $56M of shorts within 10% above. The long side is the more exposed going into next week, and the larger cascade risk is a drop.

2. Key Risks & Levels for Next Week

Long Liquidation Risk: $109.8M of longs sit at $2,340 and another $113.3M at $2,180. Between spot and $2,340 the support is thin: cost basis clusters at $2,424 with 664,828 ETH and $2,392 with 1,398,742 ETH. Watch for spot volume accelerating as $2,424 gives way, with ETF flows turning negative as they did on Sep 2.
Deeper Support Risk: The cost basis cluster at $2,296 holds 1,761,202 ETH and is the largest below spot. Only 26.2% of supply is in profit, so a break below $2,296 leaves almost all holders underwater and opens the path to the $2,180 liquidation level. Liquidation rate accelerating through $2,340 is the signal.
Short Squeeze Risk: Shorts above spot are small until $3,060, where $52.0M sits, and the big cluster is $214.3M at $3,560. Price first has to clear the cost basis cluster at $2,901 with 2,126,535 ETH and the 5,326,518 ETH cluster at $3,187. Options skew shifting toward calls as $2,901 is approached would be the tell.

On-Chain Signals — Bitcoin

Amber rows deviate >1.5σ from prior 4-week baseline • data as of 2026-09-06

Weekly Market Wrap

In the macro and equities space, the S&P 500 gained 0.42% to close at 7,718.60, while the Dow Jones and Nasdaq rose 0.43% and 0.52%, respectively. The VIX fell by 0.39 points to 14.53, indicating a modest decline in market volatility over the period. The U.S. economy added a stronger-than-expected 162,000 jobs in August, while the unemployment rate remained at 4.1%, leading markets to reprice the odds of a September Federal Reserve rate hike. India's economy expanded 7.8% in the fiscal first quarter, beating estimates, supported by strong investment and manufacturing activity, with financial services also recording robust growth. The Dollar Index (DXY) ended at 99.16, broadly unchanged over the period, while gold closed at $4,476.60.

In the crypto markets, Bitcoin (BTC) rose 2.3% over the week to around $79,700, while Ether (ETH) gained 2.7% to around $2,500. The week saw significant institutional demand for Bitcoin, with U.S. spot Bitcoin ETFs recording $986.9 million of inflows during the latest week, bringing cumulative inflows over the strongest three-week stretch of 2026 to approximately $3.8 billion. The crypto space also witnessed several key developments, including the temporary pause of Blockstream's Liquid sidechain after approximately $320 million worth of bitcoin was withdrawn in a security incident, and Harmony's proposal to sunset its Layer 1 blockchain and migrate its ONE token to Ethereum. Additionally, 600 BTC from 12 Satoshi-era mining rewards were reported to have moved after approximately 16 years of dormancy.

Looking ahead to next week, several catalysts are likely to shape the markets. In the macro space, the U.S. will release its August PPI and CPI data on Thursday and Friday, respectively, with investors closely watching for signs of renewed acceleration or moderation in inflation and their implications for the Federal Reserve's September policy decision. In the crypto space, the Senate's upcoming September 15 procedural vote on the CLARITY Act, which seeks to establish a regulatory framework for digital assets in the U.S., will be closely watched. Meanwhile, institutional adoption of crypto continues to expand, with Standard Chartered having launched spot Bitcoin and Ether trading for institutional clients in the UAE. Bitcoin will also remain in focus as it tests the $80,000 level, with resistance around $82,800 representing a key technical hurdle.