Bitcoin crossed $80,000 for the first time since May, extending its seven-day advance to roughly 25%, after the US Treasury said it would at least double buybacks of long-dated bonds. Analysts tie the move to fears over the dollar's purchasing power and a swelling $40 trillion in federal debt, while derivatives data show traders still hold back on leverage.
Bitcoin climbed more than 4% over the past 24 hours to cross the $80,000 level for the first time since May, extending its seven-day advance to roughly 25%. Separately, CryptoPotato tracked the token at a three-month high above $81,000 earlier the same day, after it traded under $65,000 the previous Wednesday.
What sparked the rally
The move traces back to the US Treasury Department's announcement last Wednesday that it would at least double buybacks of longer-dated Treasury securities, lifting purchases of 10- to 30-year debt from $2 billion to at least $4 billion per operation. The move aimed to improve liquidity in the long end of the bond market, where borrowing costs had climbed sharply.
From there, spot buying and deepening market liquidity pointed to "meaningful capital deployment", according to Glassnode.
The debasement trade returns
Treasury's intervention also pressured the US dollar, reviving Wall Street calls for the debasement trade — capital rotating into scarce assets like Bitcoin and gold as investors worry that fiscal and monetary policy could erode fiat purchasing power. The concern comes as US federal debt recently surpassed $40 trillion, with persistent deficits and heavy refinancing needs deepening uncertainty about how Washington manages the load.
Traders stay cautious on leverage
Even so, analysts at Bitfinex struck a cautious tone, noting that roughly $3 billion in crypto short positions were liquidated in two days while bitcoin network transactions remained near eight-year lows. Total BTC futures open interest remains in the low-700,000 BTC range after falling sharply during last week's rally, when a large number of short positions were squeezed out.
Long positions still account for more than 51% of total taker flow, keeping futures positioning bullish but restrained. Bitcoin's 30-day implied volatility index, BVIV, has meanwhile dropped to 45% from 49% on Friday, even as some options traders paid millions betting on a rapid move above $82,000.
Sources: CoinDesk, CryptoPotato
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