Bitcoin Gains 6% as US Treasury Doubles Down on Bond Buyback
Bitcoin (BTC) price rose by about 6% to $68,102.19 on Wednesday, outperforming the broader market rally and showing a strong correlation with Gold, suggesting a macro-driven move.
The surge was primarily driven by a surprise US Treasury intervention that lowered bond yields, sparking a historic short squeeze.
On August 19, the US Treasury announced it would at least double the maximum size of its long-term government bond buybacks to $4 billion per operation.
This quantitative easing action lowered the 30-year yield, making risk assets more attractive.
As Bitcoin broke above $66,000, it triggered over $1.3 billion in short liquidations, creating a rapid, self-reinforcing rally. This event is bullish in the short term, demonstrating how macro liquidity actions can directly catalyse violent moves in crypto.
Cryptocurrency analysts said lower yields make non-yielding, scarce assets like Bitcoin more attractive relative to bonds. The rally was fundamentally triggered by a shift in macro liquidity expectations, not just crypto-specific news.
The sharp price move triggered a cascade of liquidations in leveraged derivatives markets. Over $1.9 billion in total crypto positions were liquidated in 24 hours, with shorts accounting for $1.74 billion.
Forced buybacks from these liquidations acted as rocket fuel, accelerating the rally, crypto analysts said. Extreme leverage on the short side created a reflexive feedback loop that magnified the initial macro-driven move.
Technically, Bitcoin faces a key test at the fair value gap midline near $69,110. A daily close above this level could open a path toward $72,000.
Immediate support is the $65,000–$67,000 zone, which must hold to maintain bullish momentum. The trend is bullish but overextended; consolidation or a pullback to digest gains is likely before the next leg.
The release of the Federal Reserve’s July meeting minutes, which could either reinforce the dovish yield narrative or introduce hawkish pressure. Bitcoin’s surge is rooted in a potent mix of supportive macro policy and explosive market structure, forcing a historic unwind of bearish bets.
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