Bitcoin has surged past the $70,000 mark, reaching its highest level in over two months, as more than $1 billion in short positions were forcefully liquidated within a single hour, creating a rare short squeeze event. Policy signals, including a meeting between Donald Trump and crypto industry executives, a proposed exemption from registration requirements for certain digital assets by the US SEC, and an expansion of the Treasury's bond buyback program, have all contributed to improved risk appetite.
On-chain data further reveals that large holders have recently added approximately 43,000 Bitcoin on a net basis, signaling a reversal in market selling pressure.
The cryptocurrency market witnessed a sudden and sharp rebound, triggering a concentrated liquidation of heavily accumulated short positions. On August 20, Bitcoin broke through $70,000, hitting a new high not seen since June 2. As the price climbed rapidly, a significant buildup of short positions was systematically liquidated, with over $1 billion in short contracts forcibly closed in roughly just one hour. This represents the most substantial round of Bitcoin short liquidations since 2021.
The core driver of this rally wasn't simply new buying interest, but rather the forced exit of these pre-existing short positions. This created significant passive buying pressure, which in turn amplified the upward price movement. Simultaneously, news of Trump's meeting with crypto industry leaders and the US Treasury's expanded bond buyback program provided additional support for sentiment in risk assets.
Notably, on-chain capital flows have also shifted recently. According to data from CryptoQuant, as of August 19, large holders had net accumulated roughly 43,000 Bitcoin over the past 60 days, valued at approximately $2.75 billion at current prices. This trend began as Bitcoin approached the $60,000 level, indicating that the multi-month selling pressure has reversed.
Over $1 Billion in Shorts Liquidated Within an Hour
Data from the crypto analytics platform CoinGlass shows that in just about one hour, over $1 billion in Bitcoin short positions were forcefully liquidated. Following several weeks of consolidation and repeated support at the $60,000 level, short positions had been steadily accumulating. When the price broke upward, leveraged shorts faced margin calls and were forced to buy Bitcoin to cover their positions, which further fueled the price increase—a classic short squeeze scenario.
Joshua Lim, co-head of markets at FalconX, noted that while crypto trading desks and headlines had been dominated by sell-side commentary for weeks, Bitcoin managed to hold near $60,000, after which market sentiment and the narrative began to shift. Axel Rudolph, senior technical analyst at IG, pointed out that the rapid ascent toward $70,000 was primarily driven by short covering, reflecting a recovery in buyer confidence.
Policy and Macro News Simultaneously Improve Risk Sentiment
On the news front, Trump met with executives from Coinbase Global, Payward, and Blockchain at the White House, reinforcing market focus on the US regulatory environment for digital assets. Meanwhile, the US Securities and Exchange Commission proposed this week to exempt certain digital asset offerings from specific securities registration requirements. Trump has also previously indicated he would consider a recommendation from regulators for the government to increase its Bitcoin holdings.
On the macro side, the US Treasury announced an expansion of its bond buyback program, stating it would "at least double" the liquidity support buybacks for 10- to 30-year securities. Following the announcement, Treasury yields and the dollar declined, providing some support for risk assets overall.
Adam McCarthy, research head at crypto liquidity and market data firm LO：TECH, commented that shorting Bitcoin had been a relatively clear trade for the market, and the Treasury buyback news became one of the catalysts for fresh capital to flow back into risk assets.
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