Bitcoin extended its rally during European trading hours on August 20, climbing above $72,000 to reach its highest level since June 1, supported by signals of Federal Reserve liquidity and a softer US dollar. The upward move began after Wednesday's bond market rebound, which followed White House support signals, but crypto market analysts suggest that sustained long-term momentum will still depend on Fed policy direction.

Pedro Fontes, a research analyst at Brazilian crypto exchange Mercado Bitcoin, noted that the current macroeconomic environment strengthens bitcoin's allocation appeal. He explained that if the world's largest debt market requires external assistance to stabilize, demand for assets that are scarce, predictable, and independent of public debt expansion logic is likely to grow accordingly.

The US dollar index, which measures the currency against a basket of peers, fell 0.88% to 98.77 yesterday, marking its lowest level since May. Matt Cole, founder and CEO of asset management firm Strive, commented on social media that the dollar index is on a structural downtrend over the long term, which could create a favorable environment for bitcoin.

Traders are now focusing on today's US initial jobless claims data for further direction. Meanwhile, White House policy signals and geopolitical developments will continue to influence bond yields and potential intervention measures. According to CoinGlass data, total liquidations across the crypto market exceeded $3.3 billion in the past 24 hours, with short liquidations reaching $3 billion.

As large-scale short covering has been completed, the upward momentum driven by passive buying has moderated. Notably, bitcoin's funding rate has climbed from 3.9% to 4.6%, indicating that short positions are being rebuilt, and short-term volatility risks remain a concern for market participants.