Bitcoin continued its strong performance at the end of August, and its monthly performance is expected to set a new high for the same period in nine years. After experiencing two consecutive quarters of decline at the beginning of the year, the market has clearly rebounded in the third quarter, with capital flows and short covering becoming the main supports for this round of recovery.
Significant improvement in returns in the third quarter
As of now, Bitcoin's return rate for the third quarter of 2026 is 32.48%, which is significantly higher than its historical average return of 7.94% for the third quarter. Previously, Bitcoin fell by 22.2% and 14.09% in the first and second quarters of this year, showing weakness for two consecutive quarters.
Looking at historical data, to find a stronger third-quarter performance, we need to go back to 2017. That year, Bitcoin rose by 80.41% in the third quarter, and then continued to surge by another 215.07% in the fourth quarter, becoming an important starting point for the previous bull market.
ETF Funds and short covering drive the rise
Recently, the funding situation has also provided support for the market. Reports mention that the net inflow of spot Bitcoin in the United States ETF reached $1.92 billion in a single week, which is the largest single-week capital attraction since October 2025.
Meanwhile, during August, approximately $6.55 billion in short positions in Bitcoin were forced to close. Large-scale covering of shorts usually amplifies the upward movement, further driving up short-term price performance.
- US spot Bitcoin ETF saw a one-week inflow of $1.92 billion
- In August, the short squeeze amounted to approximately $6.55 billion.
- The current return rate for the third quarter is 32.48%.
The market is concerned about whether a repeat of the 2017 trend will occur.
The reason why the market compares this round of market trends to 2017 is that there was also a summer rally in August of that year. Although there was a pullback in September afterwards, Bitcoin still saw a cumulative increase of about 325% from the baseline level at the end of August to mid-December, with the price approaching $20,000.
However, this historical comparison more reflects market sentiment and does not necessarily mean that the trend will be simply replicated. The report also cites the views of Fidelity's Global Macro Director Jurrien Timmer, who states that Bitcoin has still maintained the lower edge of its power-law curve, and that this round of adjustment is nearing completion in terms of time, indicating that the market may be entering a new upward phase.
From the current structure, the rebound in the third quarter has reversed the weakness of the first half of the year. With the return of funds from ETF, the clearing of short positions, and the improvement in macro liquidity, the market's focus is now on whether this round of recovery can continue into the fourth quarter.
