Bitcoin has surged roughly $10,000 over the past week, breaking above $77,000 for the first time since May after the U.S. Treasury doubled its long-dated bond buybacks. The rally briefly touched $79,500 yesterday, wiping out billions in short bets along the way.
Key Takeaways
Bitcoin rose as high as $79,500 this week as the US Treasury doubled bond buybacks to $4 billion per operation.Automated liquidation engines force-closed 172,108 short positions earlier this week, the worst since 2021.Traders are now watching whether bitcoin can clear $80,000, a level not seen since May 2026.Treasury buybacks let the government repurchase older, less liquid bonds before maturity, effectively easing borrowing costs and injecting cash into the market. The new ceiling takes effect Sept. 9 and covers 10-to-30-year Treasury bonds through the current refunding quarter, which ends Nov. 4.
The announcement pulled the 10-year Treasury yield down roughly six basis points to about 4.647%, while the 30-year yield slid nine basis points to 5.196%, a retreat from the 5.33% level it hit earlier this month, its highest since 2007. Markets read the buyback expansion as a liquidity signal, and traders rotated into bitcoin as a hedge against renewed monetary easing.
“The strong trigger in bitcoin was driven by Treasury’s move to buyback bonds at the longer end of the yield curve.”
A Record Short SqueezeThe rally accelerated once bitcoin’s price broke above resistance near $70,000, a level it had not closed above since May. Short sellers who had built up positions during the six-week range were caught offside, and automated liquidation engines began force-closing those bets as the price climbed.
Institutional BackdropEquity markets moved in tandem with the Treasury announcement, with the S&P 500 adding 28.12 points to close at 7,719.88, and the Dow Jones Industrial Average rising 145.50 points to 53,488.90 (even as the Nasdaq Composite slipped 38.22 points to 26,251.49).
