Bitcoin has experienced a remarkable surge, with its price climbing to $69,910 as reported by Binance. This substantial increase, moving from around $64,000 to nearly $70,000, triggered a wave of liquidations worth billions in leveraged trading markets.
A pivotal factor behind Bitcoin’s recent price surge was the US Treasury Department’s announcement of an extensive expansion of its long-term government bond repurchase initiative. This move comes at a time of heightened market strain and as long-term bond yields reach levels not seen in nearly two decades.
The program, spearheaded by Treasury Secretary Scott Bessent, will particularly target U.S. Treasury bonds with maturities of 10-20 years and 20-30 years. The size of single buybacks in these categories, where investor interest has significantly waned since late June, will increase from $2 billion to a minimum of $4 billion.
In the wake of the Treasury’s pronouncement, long-term US Treasury yields witnessed a significant drop. This decline in bond yields heightened expectations for looser financial conditions, thereby boosting interest in alternative assets like Bitcoin and gold.
The rally in Bitcoin caught many investors, especially those with short positions in the futures market, by surprise. In a single hour, approximately $706.17 million in leveraged positions were liquidated, with $651.59 million attributed to short positions. Liquidations of long positions remained comparatively lower at $54.58 million.
Over four hours, the total liquidation volume climbed to $802.89 million, with $735.65 million in short positions closed. Expanding the timeframe reveals an even more significant impact: within the past 12 hours, $2.63 billion in positions were liquidated, with about $2.43 billion of that stemming from short positions.
The overall liquidation figures over the last 24 hours reached $2.71 billion. Short sellers suffered losses of approximately $2.47 billion during this time, while about $234.12 million in long positions were also liquidated. This suggests that the recent Bitcoin upswing has primarily manifested as a “short squeeze,” driven by the forced liquidation of short-held positions.
As per TradingView, Bitcoin achieved an intraday peak of $69,910 during its latest escalation and is trading near $69,400 at the time of this writing. The cryptocurrency easily crossed the $66,000, $68,000, and $69,000 thresholds, inching closer to the critical $70,000 landmark.
*This article is not intended as investment advice.