Bitcoin breaks past $68,000 as $1B short squeeze hits

Bitcoin rose 6% to $68,500 on Aug. 19 as a break above crowded liquidation levels triggered a one-minute price spike of roughly 4%.

Market analyst Daan Crypto Trades said in an Aug. 19 X post that Bitcoin experienced a "massive squeeze" after crossing the $67,000 liquidation cluster, with the resulting one-minute candle exceeding the size of any full daily candle recorded in recent weeks.

The broader crypto market recorded more than $1 billion in short liquidations within one hour as Bitcoin climbed above $69,000, with total crypto short liquidations later reaching $1.79 billion. CoinDesk data shows about $1.4 billion in short positions were liquidated in the last four hours. Bitcoin traded near $68,500 at the time of writing after reaching an intraday high of about $69,500 on Binance.

The breakout places Bitcoin at the $69,000-$70,000 resistance zone, where the 200-day simple moving average sits near $69,031. A daily close above that area would open the path toward $72,000, while failure to hold the breakout could return attention to $67,000 and the former neckline at $65,400.

Treasury buybacks and SEC proposal support risk appetite

The squeeze followed a U.S. Treasury announcement that it would at least double the maximum size of liquidity-support buybacks for longer-dated government bonds. Starting Sept. 9, the Treasury plans to raise the maximum purchase size for 10- to 30-year securities from $2 billion to at least $4 billion per operation. Long-term Treasury yields fell after the announcement, while the dollar weakened and US stocks advanced.

Bitcoin also benefited from a more favorable US regulatory backdrop after the Securities and Exchange Commission proposed its new "Regulation Crypto Assets" framework on Aug. 18. The framework would create tailored registration exemptions for certain crypto-related investment contracts, allowing eligible startups to raise up to $5 million over four years and qualifying issuers up to $75 million in a 12-month period.

Technical setup and ETF flows

The 4-hour Bitcoin chart shows a double-bottom structure formed between late July and mid-August, with both lows near $62,200 and the neckline at $65,400. Wednesday's move broke through that neckline, placing Bitcoin roughly $3,000 above the former resistance level. The 4-hour Chaikin Money Flow reading rose to 0.26, while the relative strength index reached 83.49, well above the 70 level commonly associated with an overbought market.

US spot Bitcoin ETFs added to the supply-side setup. Bitfinex analysts reported that the funds attracted $297.5 million on Aug. 17, their largest daily inflow of the month, followed by another $189.3 million on Aug. 18 — the first back-to-back net inflows since Aug. 7.

Bitfinex analysts said long-term holders who moved coins were recording small losses, while short-term holders were selling close to their purchase prices. "Long-term holders are realising losses, albeit minimal, at the deepest ratios since June, short-term holders are transacting at break-even and the aggregate profit ratio of every coin moved on-chain has now closed below par for 10 consecutive sessions," the analysts said.

Ether outperformed Bitcoin during the rally, rising 8.44% to $2,084, while solana gained 7% to $82. Crypto-linked equities also climbed, with Coinbase up 11% and Strategy up 13%. Gold jumped 2.7% to $4,528 an ounce, the highest price since early June.

Analyst Ted Pillows identified $74,000 as the more important weekly level, arguing that reclaiming it would reduce the likelihood of Bitcoin falling below $55,000. Bitget Wallet research analyst Zhang expects Bitcoin to trade within a broad $55,000-$80,000 range through year-end, noting that confirmation of a durable bottom still requires sustained volume and less fear.

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