Bitcoin Breaks $80K as Solana Gains 8%, But Overbought Signals Flash

Bitcoin climbed above $80,000 during Asian trading hours Tuesday, extending a sharp weekly rally that has pushed BTC more than 25% higher. The latest advance followed the Treasury’s decision to expand its bond-buyback program, while Solana led major cryptocurrencies as validators considered proposals that could reduce new SOL issuance and increase token burns.

Bitcoin gained about 4% on the day to move above $80,000, bringing its seven-day advance to more than 25%. The rally has continued since the Treasury announced plans to increase its purchases of government bonds.

However, momentum indicators suggest the market may be becoming overheated. Bitfire Research noted that a popular momentum indicator, which measures the balance between recent gains and losses on a 0-to-100 scale, had climbed to around 78 for Bitcoin.

Readings above 70 are generally considered overbought, suggesting an asset may have risen too quickly and could be vulnerable to a pullback. Bitfire identified potential selling pressure between $78,500 and $82,000, while support could emerge around $72,400 to $73,500, according to a note shared with CoinDesk.

Solana Leads Major Cryptocurrencies

Solana was the strongest performer among major cryptocurrencies, rising nearly 8% to slightly above $101 and gaining almost 35% over the past seven days.

Ether advanced more than 2% to just below $2,500, bringing its weekly gain close to 32%. BNB climbed over 2% to nearly $714, while XRP rose almost 2% to above $1.50. XRP has posted the strongest seven-day performance among the major tokens, with gains exceeding 52%.

Solana’s rally comes as network validators vote on two proposals designed to reduce the token’s supply. One proposal would slow the rate at which new SOL is issued, while the other would increase daily token burns to as much as $800,000. Voting is scheduled to conclude Thursday.

Zcash also extended its rally, gaining more than 1% to around $846 and climbing 66% over the past week, giving it the strongest weekly gain among the top 12 tokens.

Dogecoin edged higher to about 9 cents, extending its seven-day gain to roughly 32%, while Tron added around 0.5% to trade just below 35 cents. Tron has gained about 4% over the week, making it the only major token without a double-digit weekly increase.

Hyperliquid’s HYPE was the only major token in the red, slipping slightly to around $81, although it remains up roughly 36% over seven days.

Treasury Policy Keeps Crypto Rally in Focus

The latest crypto rally has been linked in part to Treasury Secretary Scott Bessent’s decision to increase government bond buybacks. The move revived interest in the so-called debasement trade, in which investors favor scarce or non-government-controlled assets as protection against currency depreciation.

Bessent offered no additional details Monday, saying the Treasury would continue its regular securities-sale program. He also indicated that no further changes are expected before the next quarterly refunding announcement in November.

Morgan Stanley estimates the Treasury could have between $80 billion and $200 billion in excess cash available for potentially larger buybacks, according to interest-rate strategist Martin Tobias.

Attention is also turning to Federal Reserve Chair Kevin Warsh, who is scheduled to speak at the Jackson Hole economic symposium on Wednesday. It will be his first appearance at the event since becoming Fed chair.

Central bankers gather annually at the Wyoming resort, and the chair’s speech is closely watched because previous addresses have sometimes provided clues about upcoming changes in monetary policy.

Lower interest rates can support crypto by reducing borrowing costs and encouraging investors to seek higher-risk assets. Higher rates can have the opposite effect by making government bonds more attractive relative to riskier investments.

Markets are also watching several upcoming catalysts, including the procedural vote on the Clarity Act, the SEC’s work on its crypto regulatory framework, the September Federal Reserve meeting, PCE inflation figures and employment data.

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