Bitcoin surged past $72,000 for the first time since June after the US Treasury said it would double the size of its debt buybacks and President Trump renewed his push for crypto legislation at the White House. The advance triggered more than $3.1 billion in short liquidations, but an overbought daily RSI reading now has traders watching for a pullback.
Bitcoin broke above $70,000 and extended its advance to $72,207 on Aug. 20, gaining roughly 15% since Monday in its sharpest rally in months. Blockchain analytics firm Glassnode called the move a 5.8-standard-deviation gain relative to Bitcoin's 30-day volatility, its largest upside shock since October 2023.
Treasury buyback plan and Trump remarks spark the rally
The advance began in the bond market on Aug. 19, when the US Treasury said it would raise the maximum size of its liquidity-support buybacks for 10- to 30-year securities to at least $4 billion per operation, up from $2 billion, starting Sept. 9. The move followed the 30-year Treasury yield reaching 5.34%, its highest level since 2007, and falling yields eased pressure on risk assets.
Trump then added momentum of his own. Meeting with crypto executives including Coinbase's Brian Armstrong and Ripple's Brad Garlinghouse at the White House, Trump urged lawmakers to pass a fair version of the CLARITY Act, legislation meant to clarify how digital assets are regulated. Trump also said expanding US government crypto holdings had been discussed, though he stopped short of announcing any purchases.
Short squeeze wipes out billions in bearish bets
As Bitcoin broke through its summer trading range, a short squeeze took hold: exchanges automatically closed unprofitable short positions, forcing traders to buy Bitcoin back and adding further upward pressure. CoinGlass data showed more than $3.1 billion in bearish crypto positions were liquidated over 24 hours, compared with about $277 million of longs, with Bitcoin accounting for roughly $1.8 billion of those short liquidations. The largest single position closed was a $48.8 million BTC liquidation on Hyperliquid.
Bitcoin's move above $70,000 also carried it past the roughly $67,100 average cost basis of short-term holders, according to CryptoQuant data cited by CryptoSlate, and those investors sent more than 44,300 BTC to exchanges, the largest such profit-taking wave this year.
Overbought signal raises pullback risk
Bitcoin reached an intraday high of $72,490 before easing back below $72,000. Its daily RSI climbed to 78.7, well above the 70 level that typically signals overbought conditions. The breakout also carried Bitcoin above its 200-day simple and exponential moving averages near $69,010, a level traders will watch as support if momentum fades.
Spot Bitcoin ETFs, meanwhile, pulled in $517 million in net inflows on Aug. 19, according to SoSoValue data.
Sources: CryptoSlate, crypto.news
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