Bitcoin jumped above $71,000 on Thursday, dragging the wider crypto complex higher after a mix of easier financial conditions, policy signals from Washington and a record short squeeze intensified the move. Ethereum rose about 18% to above $2,250, while XRP gained around 10% as spot buying spread across major tokens and total market gains added roughly $190 billion.
The catalyst started with the US Treasury’s announcement that it will expand long-dated bond buybacks, which helped pull Treasury yields lower and weakened the US dollar—two factors that typically improve the risk appetite for higher-volatility assets. The rally was then amplified by forced short covering, with liquidation data pointing to a large-scale unwind of bearish positions.
Key takeaways
- Price move: Bitcoin surged above $71,000; Ethereum gained about 18% to above $2,250; XRP rose around 10%.
- Catalyst: The US Treasury expanded liquidity-support buybacks across the 10- to 30-year maturity range, easing yields and the dollar, while Washington pushed forward crypto-policy efforts.
- Market mechanism: A near-record short squeeze helped drive liquidations of leveraged bearish trades, turning an improving macro backdrop into a rapid price move.
- Implication: The durability of the rally may hinge on continued spot ETF inflows and whether prices hold after liquidation-driven momentum fades.
Treasury action and Washington policy help shift conditions
According to the Treasury, it will at least double liquidity-support buybacks for the 10- to 30-year segment of the curve. The market impact showed up quickly in rates: the 30-year yield moved toward 5.18% and the 10-year toward 4.63%, reversing part of the prior bond selloff.
Lower yields and a softer dollar can reduce the relative attractiveness of cash and government debt, improving the appeal of risk assets. BTSE COO Jeff Mei, speaking to The Block, linked the move to a restoration of risk appetite, adding that the environment aligned with observed inflows into bitcoin exchange-traded products.
Alongside the macro shift, policy headlines provided additional support. In remarks at a White House event on Wednesday, President Donald Trump urged Congress to advance a “fair” version of the Digital Asset Market Clarity Act, with appearances from executives associated with Coinbase, Gemini and Ripple. While the Treasury’s buyback plan is designed to support bond-market liquidity, the effect spilled over to crypto through easier financial conditions and improved sentiment.
Liquidations and short covering turned gains into a stampede
Crypto’s upside momentum accelerated as traders were forced out of leveraged positions. CoinGlass data showed nearly $3 billion in positions liquidated across more than 172,000 traders over 24 hours, with shorts representing about 92% of the total. Bearish liquidations accounted for roughly $2.74 billion, according to the same dataset.
Bitcoin was among the most affected: CoinGlass data cited more than $1 billion of shorts closed within roughly an hour. Ethereum reportedly generated about $1.13 billion of liquidations, according to figures cited in the reporting. In markets, that pattern matters because when short positions are closed, exchanges typically buy back the underlying asset to settle trades—adding mechanical demand that can push prices higher, often faster than spot buyers alone.
Industry commentary echoed that interpretation. Avinash Shekhar, co-founder and CEO of Pi42, told The Economic Times that Bitcoin’s rally reflected improving macro liquidity alongside an unwind of bearish positioning. He also pointed to Ethereum’s stronger breakout as evidence that demand was spreading beyond a single-name trade.
ETF inflows and technical levels will be the test
Forced buying can create sharp moves, but it is typically temporary. To sustain the rally, analysts are watching for new capital entering the market rather than price strength that relies solely on liquidations.
US spot bitcoin ETFs attracted $517.19 million on Wednesday, described as their largest daily inflow since May 4. BlackRock’s IBIT accounted for $284.7 million, according to the figures cited. Rachael Lucas, a BTC Markets analyst, told The Block that the inflows pointed to renewed institutional positioning rather than “pure retail FOMO,” framing the buying as longer-horizon allocations.
Technicals also shifted in the market’s favor. The immediate test highlighted by the reporting is whether Bitcoin can hold above $70,000. For Ethereum, the key reference point was defending the $2,200 area. For XRP, the move past $1.15 drew attention, though FXEmpire pointed to its 200-day exponential moving average near $1.32 as a more consequential trend hurdle.
Delta Exchange analyst Riya Sehgal emphasized that the next question is whether prices remain elevated once liquidation-driven momentum fades—an important distinction for investors trying to separate a squeeze from a broader trend shift.
With the Treasury’s buyback plan and Washington’s crypto-policy push providing the opening spark and nearly $3 billion in liquidations supplying the acceleration, the market now faces a credibility test: can spot ETF flows and spot demand keep prices supported after the initial unwind?
Investors will likely watch upcoming macro signals—especially developments in US rates and the dollar—alongside continued ETF flow data and whether key technical levels for Bitcoin, Ethereum and XRP hold as the squeeze effect dissipates.
