Bitcoin (BTC) has surpassed the psychologically important $70,000 mark for the first time since June 2. Over the past 24 hours, forced liquidations of short positions reached approximately $3.38 billion, triggering a powerful upward momentum.
The rally began after a signal from Washington. The U.S. Treasury announced it would double the volume of long-term debt buybacks—at least $4 billion at a time. Following this, Donald Trump confirmed that authorities are seriously considering a large-scale government purchase of bitcoin. These news items became the trigger for a cascade of liquidations in the derivatives market.
The Mechanics of the Surge: Short Squeeze
The market was overloaded with shorts, and when the price began to rise, traders were forced to close losing positions by buying back the asset. This created a snowball effect. According to CoinGlass, positions of 193,767 traders were liquidated within a day. Shorts accounted for $3.12 billion versus just $277.16 million in longs. On the bitcoin market alone, positions worth $1.76 billion were closed. BTC is currently trading at $71,867, up about 11.5% over the day.
Spot Demand: First Signs of Life
Analysts at CryptoQuant highlight the recovery of spot demand even before the price rally began. The indicator has risen from minus 206,000 BTC on July 23 to approximately minus 5,000 over the last 30 days. This brings it close to the positive zone—for the first time since February 26.
Historically, bitcoin rises when visible spot demand transitions from negative to positive territory. The median return 60 days after such a signal was 18.1%, with a positive outcome recorded in 78% of cases. "Spot demand is a working signal," the analysts emphasize.
Glassnode: Not So Clear-Cut
However, analysts at Glassnode urge caution. The cost basis for short-term holders stands at $68,500, and BTC is currently trading above this level. But the average market price is $75,800. As long as the price remains below the purchase cost basis of short-term holders, on-chain models view the market as being in a capitulation phase, where new buyers accumulate bitcoin with increased confidence, but the market remains vulnerable to adverse macroeconomic events.
An additional obstacle is the realized profit/loss ratio. It currently stands at 0.75, significantly below the threshold of 2, at which a sustained trend reversal is confirmed. "Until this metric returns above 2, any rise should be viewed as a local rally rather than a change in market regime," the experts conclude.
The surge above $70,000 looks impressive, but on-chain data does not yet confirm the sustainability of the move. The key test will be holding above $75,800 combined with growth in spot demand. Only then can we talk about a return to an uptrend. For now, the current jump is a promising but unconfirmed signal.
My view: a short squeeze is a powerful catalyst, but it does not create organic demand. Watch the dynamics of spot volumes on key exchanges and the behavior of short-term holders. If the macroeconomic backdrop deteriorates, the current momentum could quickly fizzle out.