Bitcoin Rally: $65K–$67K Retest Zone After Short Squeeze

Bitcoin extends breakout as short squeezes drive rapid gains

Bitcoin surged to an intraday peak of $72,490 on Aug. 20, 2026, following a sharp series of forced short-covering events that pushed the price above key trend indicators. The move reclaimed Bitcoin’s 200-day simple and exponential moving averages around the $69,000 area, but a very overbought daily reading raises the probability of a corrective pullback or consolidation in the near term.

Key takeaways

- BTC reached an intraday high of $72,490 after clearing the $67,000 level. - The price moved back above both the 200-day SMA and 200-day EMA near $69,010. - Daily RSI printed 78.7, signaling overbought conditions. - Liquidation maps show the rally swept multiple large short clusters across the $65,000–$71,000 range.

Price action and trend indicators

Bitcoin (BTC) traded near $71,900 on Binance at the time of reporting, up roughly 3.8% on the day after earlier hitting $72,490. The breakout extended a rally that began when BTC escaped the $64,000–$66,000 congestion zone that dominated price action through July and much of August.

The first leg of the move drove BTC from below $65,000 to the high $60,000s, and a second burst of buying—largely driven by forced short-covering—carried the market above $72,000. On the daily chart the cryptocurrency has now crossed both its 200-day simple moving average (around $69,010) and its 200-day exponential moving average at a similar level, a threshold BTC had traded beneath since the sharp June decline.

Bitcoin price daily chart — Aug. 20 

Shorter-term moving averages are clustered lower and may act as initial support if the market retraces. The 20-day SMA sits near $64,595, while the 50-day and 100-day averages are grouped roughly between $64,264 and $66,211. Together these levels form a zone that could absorb selling pressure and become a wider support band if buyers fail to sustain the breakout above the 200-day averages.

How short liquidations amplified the move

Leverage data indicate that the rally accelerated when BTC moved through dense short positions clustered between roughly $65,000 and $66,000. As shorts were force-closed, exchanges bought Bitcoin to cover positions, which added immediate upside momentum and helped push the price toward $69,000 and beyond.

Bitcoin liquidation heatmap 

The CoinGlass liquidation heatmap shows additional liquidation bands between $69,000 and $71,000 that further fed the advance. Above the current price there were fewer large, pre-built short clusters—an indication that BTC moved quickly into untapped territory and spent limited time consolidating at the new highs.

Market-sourced data accompanying the heatmap also recorded a period in which more than $1 billion in BTC short positions were liquidated within a single hour, and around $2.7 billion of bearish positions were closed across the broader crypto market during the breakout. While liquidations can rapidly accelerate a rally, the buying they generate is often transitory once the largest short clusters are cleared.

Momentum readings and the risk of overheating

On shorter timeframes momentum remains supportive of the uptrend. The 4-hour Supertrend flipped bullish, with its trailing stop rising to about $67,752—approximately 6% below the trading price at the time of writing—providing a first dynamic support level for momentum-focused traders.

Bitcoin price 4-hour chart — Aug. 20 

Chaikin Money Flow (CMF) on intraday charts printed a positive 0.28, signaling that buying volume accompanied the breakout and that more capital flowed into BTC during sessions when the candles closed toward their highs. Positive CMF readings corroborate the view that demand—beyond mere short-covering—was present during the surge.

However, the daily picture flags caution. The 14-day relative strength index (RSI) jumped to 78.7, well above the 70 threshold commonly associated with overbought conditions. An overbought RSI does not mandate an immediate reversal—especially during a squeeze—but it does indicate that the rally has run faster than its recent trend, elevating the odds of consolidation or profit-taking in the short term.

The most recent daily candle topped near $72,490 before price eased below $72,000, underlining the need for buyers to flip the $69,000–$70,000 band into reliable support if they want to sustain the breakout and avoid a quick return under the 200-day averages.

Technicians eye $67K and $65K as potential pullback zones

Market commentators and technical traders have flagged two primary retracement targets that align with the moving-average structure and liquidity clusters. The midpoint of the breakout candle, around $67,000, is a near-term location where momentum traders could look for support, while a deeper zone near $65,000–$66,000 corresponds to the upper boundary of the prior consolidation range and the 50–100 day moving-average cluster.

Crypto trader Daan Crypto Trades noted that BTC had achieved a higher high and was testing the daily 200-day moving average region, observing that the broader daily trend has improved but that elevated volatility should be expected following the squeeze.

Lennart Snyder offered a more cautious stance, suggesting that although Bitcoin has expanded into a larger trading range, it still sits below significant supply zones and that waiting for the price to settle could be prudent before initiating new long exposure. Snyder specifically pointed to the $67,000 area as a logical support level for momentum-based entries and $65,000–$66,000 as a deeper buying opportunity.

Those technical references align with the Supertrend’s 4-hour support near $67,752 and the daily moving average cluster between $64,264 and $66,211, which could provide a stronger footprint for buyers during a larger pullback.

Upside targets and broader resistance

If Bitcoin posts a clean, sustained close above roughly $72,500, the next psychological target is around $74,000. Beyond that, earlier trading activity suggests a broader supply band between $78,000 and $80,000—levels BTC occupied before the June sell-off and where sellers may re-emerge.

Macro context: US liquidity, yields and ETF flows

Macro developments likely helped set the stage for risk-on flows into crypto. Reports that the US Treasury planned to increase long-dated bond buybacks—lifting average operation sizes from $2 billion to at least $4 billion in September—coincided with a retreat in Treasury yields and a softer dollar. Lower government bond yields reduce the opportunity cost of holding non-yielding assets and can create a supportive backdrop for Bitcoin.

That said, on-chain and derivatives data suggest forced short-covering was the immediate catalyst for the sharp intraday move. For the rally to broaden and sustain, fresh and steady demand is needed beyond the mechanical buybacks generated by liquidations.

Spot Bitcoin exchange-traded funds remain a potential source of that durable demand. SoSoValue reported net inflows of roughly $517 million into US spot Bitcoin ETFs on Aug. 19, a sizable daily allocation that would indicate institutional and retail flows are contributing to price support. Continued ETF absorption would strengthen the case that buying is shifting from a derivatives-driven short squeeze to substantive spot demand.

Risks that could sap momentum

Several scenarios could weaken the breakout: a renewed rise in US yields, a material slowdown or reversal in ETF flows, or a daily close back beneath the $69,000 mark. Any of those developments would increase the likelihood that gains are reversed or that BTC spends extended time digesting recent profits.

For bulls, the most constructive path is to hold the reclaim of the 200-day averages while allowing the daily RSI to cool. That combination—technical support intact and momentum indicators normalizing—would set a firmer base for another push above the $72,500 region and toward the next supply cluster higher.

What traders and investors should watch next

• Watch daily closes around $69,000–$70,000: holding that area would validate the breakout above the 200-day averages.
• Monitor RSI and intraday CMF: a cooling RSI with sustained positive CMF suggests demand is steady, not only derivatives-driven.
• Track ETF flows: continued net inflows into US spot Bitcoin ETFs would point to more structural buying.
• Observe US Treasury yields: if yields climb, the relative attractiveness of non-yielding assets like Bitcoin could diminish.

In short, the recent surge has placed the $65,000–$67,000 retest zone squarely in focus. Traders should prepare for elevated volatility as the market digests the short-covering move, while investors evaluating longer-term exposure will want to see whether spot demand—particularly through ETFs—can sustain the advance once liquidation-driven buying subsides.