According to Woofun AI, since its low in mid-August 2026, the Bitcoin market has experienced a sharp rebound triggered by historic short liquidations, rising 26%. According to Glassnode data, August 19, 2026 recorded the largest single-day short liquidation event since data was recorded in 2019, with short liquidations accounting for 85% of the total liquidation volume.
Notably, this statistic doesn't include Hyperliquid platform data, so the actual total amount of liquidations is higher. According to the analysis compiled by AidiDiaoJP and Foresight News, the rebound was not simply leveraged, but received substantial buying support, including the strong inflow of US spot ETFs and the simultaneous accumulation of various groups on the chain. Currently, the core variable of whether the market can continue to the January high is whether the supply-intensive zone of $81,000 to $86,000 will be effectively broken through.
The liquidation heat map reveals how prices consume “fuel” in the market. During the rebound process, simulated clearing clusters on the price path were triggered one by one, and about 86% of the clearing accounts were digested along the way. The remaining portion was distributed at both ends: the upper $82,000-86,000 range attracted a dense number of pending short liquidation orders, while the lower region of $60,500 to $62,400 left long liquidation positions. The level of leverage was significantly reduced. On a Bitcoin basis, open futures contracts contracted 11% during the window period, and the nominal expansion of the dollar was entirely contributed by rising prices, which meant that the liquidated short positions were not quickly compensated by newly opened contracts. The perpetual contract funding rate also confirms this. Throughout the rebound process, the funding rate basically fluctuated around a neutral baseline, and even had an occasional negative value. This indicates that the rebound was not driven by new bulls chasing gains, but rather a passive liquidation of positions triggered by a concentrated release of stop-loss orders. If open coin-based contracts expand again and capital rates rise at the same time, it will be the first warning sign of another influx of leverage.
Financial verification showed that real money provided an endorsement for the rebound. The US spot Bitcoin ETF achieved a net inflow of $2.23 billion during the short window period, with no outflows during the period, setting the record for the strongest weekly gold absorption in the year. Among them, the largest subscription size in a single day was the highest since January 14, 2026, and prices also regained the short-term holders' cost base during the rebound process. Trading activity has picked up, but it is far from reaching its all-time peak: the average daily ETF turnover of the squeezed week was about US$2.4 billion, roughly half of the peak period in January-January, and about one-third lower than August last year.
On-chain chips have moved up the scale ladder. Since the low on June 30, 2026, entities holding 10-10,000 BTC have reduced their holdings by about 50,500 units, while the largest group (over 100,000 BTC, mainly including exchanges, custodians, and ETF packaging products) absorbed about 591,000 units during the same period. Funding is being concentrated along the scale ladder from small to medium whales to large custodians. This trend was further strengthened during the short week: custodian groups increased their holdings of about 31,500 BTC during the window period, similar to the current week's net ETF purchases (although not on a currency-by-currency basis). Coins flowing out of whale wallets, which have been pressured to clear, appeared on institutional escrow channels on a similar scale.
The breadth of buying behavior confirmed the reality of capital inflows. The 30-day accumulation trend score shows that all six wallet size groups are at or above the neutral threshold of 0.5. This state has continued for 20 days since August 5, making it the longest simultaneous accumulation cycle for all groups since the 22-day record at the end of 2024. On the day of the short run, large wallets mainly increased their holdings, while smaller groups gradually completed opening positions throughout August. If any group's rating falls below 0.5 again, it will be the first sign of a rift in the breadth of the market, and it also means that the buying that supports this round of rebound is narrowing. The Cyclic Composite Index (based on the median of 45 on-chain cycle indicators) has climbed back to the neutral boundary of 40, after staying in the “cold” to “cool” range for seven months. The five circles in the chart mark similar periods of time in history: 2014-2015, 2018-2019, 2020, 2023-2023, and the current cycle. Each time corresponds to the lower region of the respective cycle. The indicator does not predict the rate of rebound, but it positions the current market at an early stage of the cycle, far from touching previous top zone readings.
Looking at the cross-asset dimension, the upward trend is narrow, showing the characteristic of “light weight”. Over the past month, the average return of the large-cap coin group was about 20.6%, which is basically the same as Bitcoin; while the small-cap coin group only recorded an increase of about 6.0%. The smaller the market capitalization, the smaller the inflow of capital received. This is the typical structure of an early rebound — the most liquid targets were the first to get the allocation. If small and medium market capitalization groups can keep up in the future, the market will spread to a wider range; until then, this was still a market pattern dominated by large-cap coins and Bitcoin's rise. There was a marked decoupling from US stocks, and this round of rebound diverged from macro trends. During the short window, Bitcoin rose by about 25%, and the S&P 500 index fell 1.7% during the same period. The correlation between the two one-month rolling returns plummeted to close to zero. The negative correlation with the US dollar remained stable. Similar to rapid decoupling, the average returned twice within a few weeks in 2025, so it is currently impossible to assert a structural shift — the correlation of the quarterly window has only just begun to decline. However, a rebound that was completed against the backdrop of a weak stock market is clearly not part of the “stock beta” market; its real driving force comes from the crypto market's own capital inflows.
In terms of upward resistance, the $8.1 million -86,000 supply-intensive zone became a key test. The on-chain cost distribution has sandwiched the price in the middle. Below, buyers entering the market from June to the bottom of August held a range of around $62,000-65,000, of which nearly two-thirds were short-term holders—recent buyers and tend to defend their cost line. Above, the first important supply structure is at $83,000-86,000, almost entirely composed of long-term holders who have gone through a complete decline process. The current spot price is in a gap, and the short-term holder cost base has recovered to around $70,000 (below the price).
An increase of $83,000-$86,000 would test whether long-term holders would choose to sell near break-even. As the price rises, the order book re-hangs the sale order above. Static sell orders in the 100-1000 basis point range above the median price increased by about 41% in the last five days of the window; while the entire visible order book's buy orders declined by about 32% in the last seven days. Static orders can be cancelled in an instant, so the order book reflects an area where the seller's wishes are concentrated — currently sellers tend to place orders above.
The reclustered selling orders point to the same range as multiple independent indicators: the first self-hosted cost-based platform started at $80,800, market maker gamma turned negative at $82,300, and ongoing pending liquidation orders extended to $86,000, patiently filling the supply wall in the $83,000-86,000 range. All of the above structures we're tracking are currently centered around $8.1 million to $86,000—this is the real test that the continuation of the rebound will face. The options market gave patient expectations. The two most concentrated due dates within the next month — about $10.4 billion in nominal value due this Friday, and around $13.7 billion due in the September quarter — are all far below the spot price.
The biggest pain point (the exercise price at which the maximum ratio of options expires to zero) was at $69,000 and $70,000, respectively, compared to about $79,000 in spot. Below is an area where put options are concentrated, and above is an area with pending call options. The long-term distribution tends to flatten. As of the expiration date of September 25, 2026, about 70% of the implied exercise price fell in the range of $69,000 to $89,700, and the median was only a few hundred dollars higher than the spot price. The benchmark scenario for options market pricing is that the current supply wall fluctuates steadily: neither is it expected to break through the $86,000 area, nor is it expected to return to the lower floor.
According to data compiled by Woofun AI, the market is at a critical point in the long and short game. The largest short liquidation on record in our data source initiated this round of rebound; continued ETF subscriptions, on-chain active purchases, and net exchange outflows provided the capital needed to continue the market; cyclical indicators still show that the market is in its early stages. This is a typical picture of a phased rebound. The confirmation signal comes from above: a stable effective closing above $8.33,000 and continued ETF inflows will indicate that the supply wall is being digested rather than respected. The weak signal was first reflected in the loss of the $70,000 short-term holders' cost base, followed by the $62,000-65,000 floor range guarded by recent buyers. If the price returns to the squeezing starting point of $62,900, the entire market will completely recoil.