Bitcoin surged to $75,000 after a short squeeze liquidated $4 billion in leveraged positions. The catalyst was a Treasury bond-buyback expansion. Whether the rally holds past November hinges on new capital, traders said.
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A two-day surge in cryptocurrency prices wiped out more than $4 billion in leveraged short positions, pushing Bitcoin above $75,000 for the first time in weeks. The liquidation cascade began after the U.S. Treasury Department announced an expansion of its bond repurchase program, a move that compressed long-end yields and sent risk assets higher.
Bitcoin climbed about 18% over the week, touching $75,000 in Friday's Asian session after trading near $64,100 two days earlier. The move began on August 19 when the Treasury said it would double the maximum size of its bond buyback operations to $4 billion per session, effective September 9 through November 4. The program pulls older, less liquid securities out of circulation, which lowers long-term yields and improves conditions for risk-on assets like crypto.
Bitcoin jumped from $64,100 to $66,800 within an hour of the announcement. That was enough to trigger the first wave of forced closures on leveraged bearish positions. Automatic liquidations happen when a trader's collateral can no longer cover losses on a leveraged short bet. Exchanges close the position through market buy orders, which drives prices higher and pulls in more forced buying.
The cascade ran for about 18 hours. Short-position liquidations totaled roughly $2.77 billion, or 92% of all forced closures during that period, data from Coinglass showed. The single largest position terminated was a $25.13 million Bitcoin short on the Hyperliquid exchange.
Short positioning had built up over six weeks before the squeeze. Funding rates on Bitcoin perpetual futures went negative in late July and stayed there through mid-August. Negative funding means short holders receive payments from long holders, drawing in traders who were not necessarily bearish on price but looking for the carry. By August 18, shorts accounted for more than 51% of open interest across Binance, OKX, and Bybit. When the Treasury news broke, that concentrated short book could not absorb the upward move without widespread forced buying.
A second catalyst pushed prices higher the next day. President Trump urged Congress to pass the Digital Asset Market Clarity Act during a White House meeting that included Coinbase, Gemini, Ripple, and Chainlink Labs. Bitcoin went from $68,000 to above $71,000 on August 20.
Ethereum jumped 18% in a single session, its largest one-day gain since March 2024. Solana rose more than 5% daily and 17% for the week. Dogecoin added nearly 9%.
Binance handled about $518 million in liquidations across the two days. Hyperliquid processed roughly $513 million. Bybit logged around $303 million.
Bitcoin's market capitalization stands at $1.5 trillion. That is still about 40% below its October peak above $126,000.
The Treasury's enhanced buyback program runs until November 4. Whether the rally holds beyond that date depends on whether fresh capital flows into the market, or traders simply adjust positions ahead of the next catalyst, several traders said.
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