Bitcoin has climbed above $72,000 for the first time since June after falling US Treasury yields and renewed support for cryptocurrency legislation from Washington forced a sharp reversal in bearish market positions.
The cryptocurrency rose to $72,207 on Thursday, taking its gains since Monday to about 15%, according to CryptoSlate data. Bitcoin was up 10.92% over the previous 24 hours and remained the world’s largest cryptocurrency by market capitalisation.
Blockchain analysis firm Glassnode said Thursday’s move represented a gain of 5.8 standard deviations compared with Bitcoin’s 30-day volatility. It was the asset’s biggest positive price shock since October 2023.
The rally was supported by two developments in the United States. The Treasury Department announced that it would double the planned size of buybacks of long-dated government debt, while President Donald Trump renewed his call for Congress to pass legislation establishing a regulatory framework for digital assets.
More than $3.1bn (£2.3bn) of bearish cryptocurrency positions were liquidated over a 24-hour period, according to CoinGlass. That compared with about $277m in long positions. Bitcoin accounted for approximately $1.8bn of the liquidated short positions, while traders holding bearish Ethereum positions lost nearly $1.2bn.
The largest individual liquidation was a $48.8m Bitcoin position on Hyperliquid.
Treasury move and Trump intervention
The rally first gathered pace in the bond market on 19 August, when the US Treasury said it would increase the maximum size of liquidity-support buybacks for 10- to 30-year securities to at least $4bn per operation, from $2bn. The new limit is due to take effect on 9 September.
The announcement followed a rise in the 30-year Treasury yield to 5.34%, its highest level since 2007. Yields subsequently fell, reducing one of the pressures that had unsettled risk assets as investors dealt with higher US borrowing costs.
CryptoSlate reported that Bitcoin then began moving beyond the trading range that had restricted it near $67,000 for much of the summer.
Trump added another boost during a White House meeting with cryptocurrency industry executives, including Coinbase chief executive Brian Armstrong, Ripple’s Brad Garlinghouse and Kraken co-CEO Arjun Sethi.
He called on lawmakers to approve a “fair version” of the CLARITY Act. The proposed legislation would define which digital assets should be regulated as securities or commodities and set out how responsibility should be divided between federal regulators.
The bill failed to progress before the Senate’s August recess. A procedural vote is scheduled for 15 September, and the legislation will require 60 votes to move forward.
Armstrong also backed Trump’s position on the bill in a post on X.
During the meeting, Trump was asked whether his administration could acquire significant quantities of Bitcoin or other digital assets. He raised the possibility of expanding the US government’s cryptocurrency holdings.
“Well, it’s been talked about,” Trump said, adding that he would consider recommendations from SEC Chairman Paul Atkins, CFTC Chairman Michael Selig and other officials.
He did not announce any purchases.
Trump’s 2025 executive order established a Strategic Bitcoin Reserve using Bitcoin already held by the US government and instructed officials to examine budget-neutral methods of acquiring more. Any substantial new buying programme would therefore depend on how the administration planned to fund it.
Short positions fuel the surge
Once Bitcoin moved above its recent range, the increase accelerated as exchanges automatically closed short positions that had become increasingly unprofitable. The forced buying required traders to repurchase Bitcoin, adding further upward pressure and helping turn an advance driven by economic and political developments into a rapid breakout.
The climb also encouraged some existing investors to take profits. CryptoQuant said Bitcoin’s move above $70,000 took it beyond the estimated average purchase price of $67,100 for short-term holders.
Those investors transferred more than 44,300 BTC held at a profit to exchanges, representing the largest profit-taking wave recorded this year, according to the firm.
Market sentiment has also improved rapidly. The Crypto Fear & Greed Index reached its highest level since October 2025, when Bitcoin hit its latest cycle peak.
Bitcoin has now moved above its 200-day moving average, which stood near $69,000, as well as breaking through $70,000. However, the liquidation of a large proportion of bearish leverage means the forced buying that helped drive the rally has already diminished.
The next test will be whether new demand in the spot market can absorb profit-taking and sustain the advance once the short squeeze has run its course.
Bitcoin’s potential has been highlighted by Oluwapelumi, who writes about areas including decentralised finance, hacking, mining and cryptocurrency culture. Andjela entered the cryptocurrency industry in 2018 after several years covering politics, bringing a background in classical education and journalism.
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