Bitcoin tops $71,000 as $3B short squeeze, Treasury buybacks fuel rally

Bitcoin rose 11.4% to $71,868 on Thursday, breaking above $71,000 for the first time since June as $3 billion in short positions were liquidated across crypto derivatives markets.

CoinGlass data shows 172,642 traders were liquidated in the last 24 hours, totaling nearly $3 billion across the crypto market. BTC accounted for $1.67 billion of the total and ETH $1.14 billion, with more than $1 billion clearing in a single hour. Short liquidations hit $3 billion against $263.5 million on the long side, the largest short liquidation event since at least 2021.

The U.S. Treasury announced it will at least double liquidity support buybacks for longer-dated nominal coupon securities from $2 billion to at least $4 billion per operation, effective Sept. 9. The move pulled the 30-year yield back from 5.337%, its highest since 2007, and boosted risk appetite. Spot Bitcoin ETFs recorded $517 million in net inflows on Aug. 19, the largest daily intake since early May, according to SoSoValue data.

Bitcoin now faces resistance at $72,000 and the short-term holder cost basis near $72,200. A sustained move beyond that zone could open a path toward $75,000, followed by the upper portion of the larger range near $80,000. Failure to hold $70,000 could lead to a retest of $68,000.

Treasury buybacks and CLARITY Act push provide macro tailwind

The Treasury's expanded buyback program, which takes effect Sept. 9 and runs through Nov. 4, is designed to support liquidity in older government securities. It is not Federal Reserve asset purchases or monetary stimulus, but larger buybacks can improve trading conditions in the Treasury market. Long-dated yields declined following the announcement, while the U.S. dollar weakened and risk assets advanced.

President Donald Trump added a second leg to the rally hours later, urging Congress to pass the Digital Asset Market Clarity Act at a White House crypto summit. The bill would place Bitcoin and other cryptocurrencies under commodity regulations rather than securities laws. The Senate departed Washington without taking up the bill before its August recess, with Majority Leader John Thune filing a cloture motion that sets up a procedural vote on Sept. 15. Trump also floated the idea of sizable U.S. bitcoin purchases and revealed regulators are exploring a compliant route for Hyperliquid, sending the HYPE token up 26%.

Derivatives positioning and technical levels

Open interest rose 9.11% to $131.25 billion, with BTC up 7.18% to $23.4 billion and ETH up 12.36% to $13.2 billion, according to Coinalyze. Funding rates remain restrained given the scale of the move, with BTC at 0.0101% and ETH at 0.0103%, suggesting the leverage build-up that typically follows a squeeze this size has not yet arrived.

The aggregated long-short accounts ratio for BTC fell to 0.835 from around 1.05 on Tuesday, meaning more accounts were positioned short into the break than long. That skew turned a technical breakout into a $3 billion unwind.

On the daily chart, Bitcoin trades above the 200-day EMA at $71,463, with the 61.8% Fibonacci retracement at $70,333 adding another layer of nearby demand. The RSI hovers near 79 in overbought territory, suggesting strong but potentially vulnerable upside pressure. Initial resistance sits at the 78.6% Fibonacci retracement around $73,740.

Ether rose 19% to $2,270, XRP gained 15% to $1.16, and Solana advanced 12.6% to $87.08. Bitcoin dominance climbed to 59.2%, with capital concentrating in the largest cryptocurrencies. Coinbase's Fear and Greed index jumped to 59, a "greed" reading, from 41, "fear," while bitcoin daily trading volume is up 250% at $59 billion.

This article is for informational purposes only and does not constitute investment advice.