Bitcoin (BTC) has recorded a sharp incline today. The top crypto asset has climbed almost 9% today, from $64,500 to $69,500 before settling around $68,805. The move represents a breakout from the multi-week trading range that had kept Bitcoin largely between $62,000 and $65,000. The rapid ascent occurred with limited pullbacks, indicating that derivatives activity played a significant role in the move. The market sentiment quickly shifted as BTC broke above $69k, with alts following the surge. ETH also recorded a huge upsurge crossing $2,100.

Treasury Liquidity Move Boosts Market Sentiment

The initial catalyst for the rally came from a U.S. Treasury announcement about its nominal long-end liquidity support buybacks. The Treasury said it would at least double the maximum size of its buybacks in the 10 to 20-year and 20 to 30-year sectors from $2 billion to at least $4 billion per operation. The change is scheduled to take effect on September 9, 2026.

Markets interpreted the announcement as a potential liquidity boost for the longer-dated Treasury market. Treasury yields subsequently moved lower, while broader risk sentiment improved across financial markets. Bitcoin benefited from the shift in sentiment.

Bitcoin Rally Intensifies as Short Positions Liquidate

While the Treasury announcement provided the initial spark, the sharp acceleration in Bitcoin price amplified the wave of futures short liquidations. More than $1 billion in crypto short positions were reportedly liquidated during the intense market move. Large leveraged positions on derivatives platforms were also reportedly wiped out as Bitcoin continued higher. Once Bitcoin moved above the range highs, traders were forced to close bearish positions, creating additional demand and quickly accelerating the rally. Bitcoin open interest also declined during the move as leveraged positions were closed.

The short squeeze has removed a significant amount of bearish leverage from the market. However, to continue the rally further, BTC needs supportive spot demand and institutional flows. Otherwise, a short-term pullback is likely once forced buying subsides. Overall, the move combined a positive macro liquidity catalyst with heavy futures short liquidations.