Bitcoin rose about US$ 10,000 in a week and surpassed US$ 77,000 for the first time since May, in a move that triggered approximately US$ 3 billion in liquidations of positions betting on the cryptocurrency's decline. At the week's peak, the asset reached US$ 79,500.
The rally gained strength after six weeks of trading concentrated between US$ 60,000 and US$ 65,000 and coincided with a change in the U.S. Treasury's bond buyback operations.
The Treasury Department announced on Wednesday (19) that it will raise the per-operation limit for long-term bond buybacks from US$ 2 billion to US$ 4 billion. The new configuration takes effect on September 9 and includes securities with maturities between 10 and 30 years through November 4.
Treasury yields decline
After the announcement, the 10-year Treasury yield fell about 6 basis points to 4.647%, while the 30-year bond fell 9 basis points to 5.196%.
The expansion of buybacks was interpreted by market participants as a favorable factor for liquidity and contributed to increasing demand for risk assets.
“The strong trigger for bitcoin was the Treasury's measure to buy back bonds on the long end of the yield curve,” said Gautam Chhugani, strategist at Bernstein.
The move also reinforced expectations of less restrictive financial conditions, a scenario that typically increases interest in assets like cryptocurrencies.
Breaking above US$ 70,000 accelerates liquidations
The rally gained speed after bitcoin broke through the US$ 70,000 region, a level above which it had not recorded a close since May.
Investors positioned for a decline were forced to close positions as the price kept rising. In total, automatic liquidation mechanisms closed 172,108 short positions on derivatives exchanges.
The liquidations totaled about US$ 3 billion, the largest such event involving short positions since 2021. In a 24-hour window during the move, bitcoin gained 11%.
This mechanism can intensify rallies. When a leveraged short position is liquidated, the broker must buy back the asset to close the trade, adding new buying pressure to the market.
Cryptocurrency regulation returns to focus in the U.S.
The rally also occurred while the U.S. government resumed discussions on regulating the sector.
President Donald Trump publicly called on Congress to pass the CLARITY Act, a bill aimed at establishing federal rules for the digital asset market.
The same week, Trump hosted executives from Coinbase and Robinhood at the White House. No new regulatory measures were announced after the meeting.
The major U.S. stock indices had mixed performance. The S&P 500 rose 28.12 points to 7,719.88, while the Dow Jones gained 145.50 points, reaching 53,488.90. The Nasdaq Composite fell 38.22 points to 26,251.49.
After reaching US$ 79,500 during the week, bitcoin began approaching the US$ 80,000 mark again, a level it has not reached since May.
