The leading cryptocurrency has returned to the psychologically important level of $70,000 for the first time since June 2. Over the past 24 hours, the market witnessed a powerful forced liquidation of short positions, exceeding $3.38 billion, which served as a catalyst for a sharp upward move.
The rally began with a macroeconomic signal from Washington. The U.S. Treasury announced it would double the size of its long-term debt buybacks—to at least $4 billion per operation. Against this backdrop, Donald Trump also stated that authorities are seriously considering a large-scale purchase of bitcoin for state reserves. This created ideal conditions for a short squeeze: the market was overloaded with short positions, and their forced closure triggered a cascade of liquidations.
According to exchange aggregators, positions of 193,767 traders were liquidated within a day. Shorts accounted for $3.12 billion, while longs lost only $277 million. On the bitcoin market, positions worth $1.76 billion were closed. BTC is currently trading near $71,867, having gained approximately 11.5% over the day.
Spot demand is recovering
Analysts are recording an important signal: spot demand for bitcoin has almost returned to positive territory. The indicator has risen from minus 206,000 BTC on July 23 to approximately minus 5,000 BTC over the last 30 days. This is the first such approach to positive territory since February 26. Historically, the median BTC return within 60 days after crossing this line was 18.1%, with a positive outcome recorded in 78% of cases.
However, I would not rush to optimistic conclusions. The shift of spot demand into positive territory is a working signal, but it only points to potential rather than guaranteeing a trend reversal.
On-chain data warns
According to Glassnode data, the cost basis for short-term holders stands at $68,500, and BTC is trading above this level. But the average market price is $75,800, indicating that many recent buyers are still at a loss. As long as the price remains below the cost basis of short-term holders, on-chain models will view the market as being in a capitulation phase, vulnerable to adverse macroeconomic events.
Additional pressure comes from the realized profit/loss ratio. It currently stands at 0.75, significantly below the threshold of 2, at which a sustained trend reversal is typically recorded. Until this metric returns above 2, any rise should be viewed as a local rally rather than a change in market regime.
My verdict: the current surge is a classic short squeeze, reinforced by political signals. However, two conditions are needed to confirm a bullish trend: sustained spot demand and the return of the profit/loss ratio above 2. Without this, the move toward $70,000 remains promising but unconfirmed.