United States national debt has just hit the $40 trillion mark, triggering a sharp reaction in the crypto market. Over the past week, the price of Bitcoin surged more than 23%, touching $79,000 during trading on Friday, August 22, 2026. According to WatcherGuru, this movement marked Bitcoin’s largest weekly gain since March 2023.
Strong Boost from Short Liquidations
Barchart detected that last week’s movement pushed Bitcoin above the key 200-day moving average technical level for the first time since November 2025. This rally did not happen in isolation. The main catalyst came from the mass liquidation of short positions in the derivatives market, forcing speculators to buy back their assets amid skyrocketing prices. At the same time, capital inflows into spot Bitcoin ETFs began to improve.
The impact of this surge quickly spread across the market. Ethereum recorded a 31% gain, Solana rose 28%, while XRP soared up to 53% within the same timeframe. Several alternative coins nearly doubled their growth in just a matter of days. The Pump.fun (PUMP) token led with a 98.9% surge, followed by Ethena (ENA) which rose 98.3%, and Stacks (STX) at 94.8%. This bullish sentiment also lifted crypto industry stocks, with Canaan, Metaplanet, Coinbase, and Robinhood all closing the week with double-digit gains.
Interest Expense Exceeds Healthcare Costs
The Kobeissi Letter highlighted that skyrocketing asset prices are closely linked to the widening deficit. Currently, the annualized interest bill on US government debt has ballooned to exceed the entire cost of the Medicare healthcare program. In response to this pressure, the US Treasury Department plans to double its bond buyback operations to $4 billion - a loose monetary measure that typically benefits non-traditional assets.
Fiscally, these conditions have put hedging asset classes back in the spotlight. Investor Ray Dalio recommended allocating 15% of an investment portfolio to gold, with a small additional portion for Bitcoin in preparation for a US debt crisis.
$100K Target Feels Too Low
A flurry of market data and macroeconomic conditions has forced financial institutions to recalculate their projections. A report from Standard Chartered states that Bitcoin has the potential to reach a new price record of $126,000 before the end of 2026. The bank predicts that this recovery phase could accelerate even faster after October 6.
Geoff Kendrick, digital asset analyst at Standard Chartered, has even begun revising the short-term target he frequently uses as a benchmark. “For the first time this year, there is a risk that my year-end prediction of $100,000 is too low,” Kendrick commented on the asset’s latest movement. As the national debt deficit continues to widen without limit, buyers see it as an open invitation to accumulate the asset once again.
Reported by Cointelegraph.
Read also: How to Read Candlesticks for Beginners
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
