Bitcoin Surges as Treasury Move Triggers Massive Short Squeeze

Crypto markets saw a major shift on Wednesday as Bitcoin jumped 5.8 percent to clear $69,500. The surge followed a surprise move from the US Treasury, which announced plans to increase buybacks of long term government bonds to at least $4 billion per operation. This action eased pressure on bond yields, causing investors to shift capital away from debt and toward riskier assets like Bitcoin and Ethereum.

The rapid price increase caught many traders off guard, causing a massive short squeeze. Within a single hour, over $1.23 billion in bets against the market were wiped out. Across a full day, liquidations topped $1.57 billion, affecting more than 114,000 traders. As these short positions were forced to close, the resulting buying pressure helped push prices even higher.

Technically, Bitcoin is currently working through a fair value gap created during the June market crash. This zone sits between $67,516 and $70,686. Analysts are watching the $69,110 mark closely, as a daily candle close above this level could suggest the rally has room to continue toward $72,000. If the price fails to hold this level, the market may see a return to previous downward trends.

Despite the excitement, some analysts urge caution. While spot demand for Bitcoin is showing its first signs of growth in months, funding rates remain at high levels that have historically signaled local tops. With Federal Reserve minutes pending, traders are keeping a close eye on whether this rally represents the start of a new bull cycle or a temporary swing in a broader downtrend.