Bitcoin has climbed toward $73,000 after a record short squeeze and falling Treasury yields drove an 11% rally, but analysts say sustained ETF and spot demand will decide whether the breakout holds. U.S. spot Bitcoin ETFs pulled in $517 million on Aug. 19, their strongest inflow since May, while nearly $2.7 billion in bearish crypto positions were liquidated as the price broke above $70,000.
Bitcoin traded near $72,600 on Aug. 20 after touching about $72,800, extending a rally that began once the price cleared resistance around $65,000 and $67,000. The asset had spent roughly six weeks inside a narrow range before the breakout caught bearish traders positioned for another decline.
A record short squeeze accelerated the move
Nansen Senior Research Analyst Nicolai Søndergaard said forced short covering accelerated Bitcoin's rise, though institutional demand and improved liquidity conditions had already tilted the market higher. CoinGlass data showed more than $1 billion in Bitcoin shorts were liquidated within about one hour. Short liquidations across the wider crypto market reached approximately $2.7 billion over 24 hours, the largest total in records dating to 2021.
Shorts accounted for about 92% of almost $3 billion in total liquidations across more than 172,000 traders, and this short squeeze forced traders to buy the asset needed to close their positions, adding speed to the rally.
ETF demand may decide if $70,000 holds
U.S. spot Bitcoin ETFs recorded about $517 million in net inflows on Aug. 19, the strongest daily total since May, according to SoSoValue data cited by analysts. LVRG Research Director Nick Ruck said the Treasury announcement helped institutional sentiment after months of net ETF outflows, but he cautioned that one inflow session would not establish a lasting trend.
According to Ruck: "Sustained inflows are unlikely without additional confirmation." Once forced buying fades, Søndergaard expects spot and ETF flows to determine whether Bitcoin can build support above $70,000.
CoinEx Chief Analyst Jeff Ko pointed to the 200-day moving average near $69,000 as the key technical level, adding that turning the former resistance zone into support would strengthen the setup. That comes after approximately $650 million in net ETF inflows during the week.
Falling Treasury yields have eased pressure
The rally began after the U.S. Treasury said it would at least double its long-end liquidity-support buybacks, with the maximum purchase size for 10-to-20-year and 20-to-30-year securities rising from $2 billion to at least $4 billion per operation starting Sept. 9. Following the announcement, the 30-year Treasury yield fell from 5.34%, its highest level in 19 years, to about 5.19%. BTSE Chief Operating Officer Jeff Mei called the buybacks a short-term response to a lasting fiscal problem, noting the purchases may cool yields but do not reduce the federal deficit or remove inflation pressure.
Source: crypto.news
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