Bitcoin has surged 40% this quarter, its best three-month run since late 2024, as the Treasury's debt buyback plan and a weakening dollar push money into what traders call the debasement trade. Bitfinex says leverage has largely cleared out of the futures market, while CryptoQuant points to rising profit-taking and softer spot demand as signs the rally may be cooling.
Bitcoin has surged 40% over the past quarter, its best quarterly performance since Q4 2024, with the price near $83,698, up 6% over the past 30 days.
The debt buyback trade fuels the surge
The rally accelerated after August 19, when the U.S. Treasury announced it would more than double the size of its government debt repurchases. As the Kobeissi Letter noted, bitcoin is up close to 30% since that announcement, as the Treasury has tried to lower bond yields that had climbed to highs not seen since the 2000s. Yields have stayed elevated despite the effort.
Lower long-term yields cut the opportunity cost of holding non-yielding assets such as bitcoin and gold, feeding the debasement trade, a move into assets seen as a hedge against a weakening currency. That trade has intensified since total U.S. debt topped $40 trillion in July. Bitcoin has also shrugged off the Fed raising interest rates and lawmakers blocking the Clarity Act, staying well off its October all-time high of $126,080 even after dropping more than 50% from that peak, in what has still been the shallowest bear market in bitcoin's history so far.
Bitcoin moved back into a bull market after crossing above its 365-day moving average, a level CryptoQuant called the definitive technical signal marking the start of prior cycles.
Leverage clears out of the futures market
Bitfinex analysts told Bitcoin.com News that much of the borrowed money and aggressive futures betting has left the market. Aggregated futures open interest is at its lowest level since March, and implied volatility sits near a one-year low, the analysts said. Leverage reduction has historically supported price, Bitfinex said: since 2022, elevated futures settlement ratios paired with compressed carry have preceded a median 30-day gain of 8.9%.
Futures open interest across exchanges totals about $53 billion, led by Binance at $11.01 billion and CME at $8.46 billion. Calls make up 60.88% of options open interest, though Deribit's October max-pain level sits near $76,000, below bitcoin's spot price.
Profit-taking signals a cooling bull market
CryptoQuant's Bull Score Index remains at 90, but the firm flagged rising selling pressure and weaker demand. Short-term holders' unrealized profit margin has risen to 33%, the highest since December 2024, and similar levels have preceded profit-taking before. Holders cashed out about 25,700 BTC in profit on September 22, the largest single-day realized-profit figure recorded in 2026.
Apparent spot demand fell by roughly 170,000 BTC over the past 30 days, and speculative futures demand growth slowed. CryptoQuant identified the 365-day moving average near $80,000 and the 200-day moving average near $71,000 as key support levels to watch.
Sources: Bitcoin Magazine, Bitcoin.com News, CryptoPotato
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