- Bitcoin has broken free from a six-week trading range, triggering nearly $3 billion in short liquidations and marking the biggest forced short unwind since at least 2021.
- BTC climbed above $71,000 for the first time since June, gaining about 3.5% since midnight UTC and roughly 11% over the past 24 hours. The move ended the range that had kept Bitcoin contained since July 8.
- The rally was initially driven more by market positioning than by a major fundamental development. For six weeks, Bitcoin traded mostly between $62,000 and $66,900 as volatility fell to multi-year lows.
- The prolonged consolidation encouraged traders to build bearish positions near the top of the range, leaving a large cluster of liquidation levels between $65,000 and $67,000.
- The catalyst came when the US Treasury announced plans to at least double its long-term bond buybacks to $4 billion. The news helped pull the 30-year Treasury yield down from 5.337%, its highest level since 2007, encouraging demand for riskier assets.
- Once BTC broke through the upper boundary, short sellers were forced to buy back their positions. That added further momentum, sending Bitcoin more than 8% higher within an hour.
Trump’s Crypto Comments Extend the Rally
- President Donald Trump weighed in several hours later, after Bitcoin had already completed much of its initial surge.
- Trump urged lawmakers to advance the Clarity Act, said the US could purchase substantial amounts of Bitcoin and pointed to efforts by regulators to establish a compliant US route for Hyperliquid.
- The comments gave the rally another boost and helped keep Bitcoin above $70,000.
- Ether was trading near $2,270, just below its three-month peak, after gaining 19% over 24 hours. Solana, XRP and Dogecoin also posted double-digit increases.
- Coinbase’s Fear and Greed Index moved to 59, signaling “greed,” from 41, which indicated “fear.” Bitcoin’s daily trading volume jumped 250% to approximately $59 billion.
Short Sellers Take Heavy Losses
- Short liquidations reached around $3 billion over the past 24 hours, compared with roughly $263.5 million in long liquidations.
- Bitcoin accounted for about $1.67 billion of the liquidated shorts, while Ether contributed approximately $1.14 billion. More than $1 billion was wiped out within a single hour.
- The BTC long-to-short account ratio dropped to 0.835 from about 1.05 on Tuesday, indicating that bearish positioning was dominant before the breakout.
- That positioning imbalance helped transform Bitcoin’s technical breakout into a powerful short squeeze.
Derivatives Activity Picks Up
- Total crypto open interest increased 9.11% to $131.25 billion, according to Coinalyze. Bitcoin OI rose 7.18% to $23.4 billion, while Ether OI climbed 12.36% to $13.2 billion.
- HYPE recorded the largest OI increase, jumping 29%. Most of that growth followed Trump’s comments on a potential US regulatory pathway for Hyperliquid rather than the initial Bitcoin breakout.
- Funding rates remained relatively modest despite the size of the rally, with BTC at 0.0101% and ETH at 0.0103%.
- The subdued funding environment indicates that traders have yet to rebuild the heavy leverage that often follows a squeeze of this magnitude.
- Futures premiums also narrowed, with the Aug. 28 OKX Bitcoin contract carrying a 7.68% annualized basis and the Sept. 25 Deribit contract at 4.71%.
- The structure suggests spot demand is driving the rally, rather than excessive futures leverage, making the move relatively cleaner.
Altcoins Gain Ground
- LIT jumped 12.4% since midnight to $2.92 and gained 26.5% over 24 hours, lifting its seven-day performance to 22.8%.
- PUMP added 9.39% to $0.003285, extending its recent advance as 24-hour trading volume reached $112 million.
- ETHFI rose 5.68% to $0.5566 and was up 46.3% over the past week as Ethereum-linked tokens benefited from ETH’s strength.
- HYPE climbed 2.4% since midnight to $71.12 and was 21.9% higher over 24 hours following Trump’s remarks on a possible US pathway for Hyperliquid.
- WLFI bucked the broader trend, falling 4.66% to $0.0586 and ranking among the weakest performers.
- Bitcoin dominance increased to 59.2%, while CoinMarketCap’s Altcoin Season Index dropped to 36 from 44. The data points to investors favoring Bitcoin and other major cryptocurrencies over smaller-cap tokens.
