Bitcoin Surges 8% Toward $70,000, Triggering $1.44 Billion Short Squeeze

Bitcoin surged nearly 8% on Thursday, climbing from approximately $64,600 to approach the critical $70,000 resistance level in a move that triggered a massive short squeeze liquidating an estimated $1.44 billion in bearish positions.

The rally to a near two-month high caught many traders off-guard. According to market data cited by Investing.com, short liquidations outpaced long liquidations by a ratio of approximately 8.6-to-1, marking one of the most significant bearish liquidations in recent months.

Catalysts for the Rally

The primary driver for the move appeared to be a U.S. Treasury announcement that it would at least double the size of its long-term bond buyback program. Effective September 9, 2026, each operation will increase to a minimum of $4 billion for 10- to 30-year Treasuries. The news sent long-term bond yields lower and weakened the U.S. dollar, providing a tailwind for risk assets like cryptocurrencies.

Supporting the rally was a return of institutional capital into U.S. spot Bitcoin ETFs, which recorded combined net inflows of approximately $487 million on August 17 and 18. On-chain data provided further bullish signals, with CryptoQuant reporting that large holders, or "whales," have accumulated about 43,000 BTC over the past 60 days.

A Divided Market Outlook

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Despite the strong move, analysts remain divided on whether it marks a sustainable trend reversal or a technical bounce within a broader bear market. Analysis from VanEck's research team suggests a market bottom may be forming, noting that 8 of its 12 "market capitulation" indicators have recently signaled extreme pessimism.

However, some strategists remain cautious. Bloomberg Intelligence's Mike McGlone warned that continued price action below $69,000 reinforces a bearish technical picture. Anthony Scaramucci, founder of SkyBridge Capital, acknowledged a "clear bear market" but noted that Bitcoin's relative resilience compared to past downturns is a "strangely good signal" that buyers are positioning for the next cycle.

Market Impact and Key Levels

The rally extended across the digital asset market, with Ethereum (ETH) reclaiming the $2,000 level and other major altcoins like Solana (SOL) and XRP posting significant gains. The Crypto Fear & Greed Index moved back into the "Neutral" zone with a reading of 41.

Investors are now closely watching whether Bitcoin can achieve a daily close above the $70,000 psychological and technical resistance. A failure to break through could see the price retest a key support zone between $64,000 and $65,000. Upcoming U.S. economic data, including the Philadelphia Fed Manufacturing Index and PMI figures, will be monitored for their potential impact on Federal Reserve policy and market liquidity.