The leading cryptocurrency has once again reclaimed the psychological level of $70,000, for the first time since June 2. Over the past 24 hours, the price has surged more than 11%, and forced liquidation of short positions has reached $3.38 billion. However, beneath the outward optimism lie troubling signals that cast doubt on the sustainability of this move.
The trigger for the rally was a powerful signal from Washington. The U.S. Treasury Department announced a doubling of long-term bond buyback volumes—at least $4 billion per auction. This news coincided with Donald Trump's statement that the government is seriously considering the possibility of a large-scale bitcoin purchase for state reserves. The market reacted instantly: shorts accumulated over weeks of consolidation began to close en masse, fueling a cascade of forced liquidations.
According to exchange metrics, positions of 193,767 traders were liquidated within 24 hours. The volume of forced short closures amounted to $3.12 billion against a modest $277 million in longs. On the bitcoin market itself, positions worth $1.76 billion were liquidated, underscoring the scale of the short squeeze. BTC is currently trading around $71,867, showing a gain of about 11.5% over 24 hours.
Spot demand is returning, but there's a catch
CryptoQuant analysts highlight the recovery in spot demand, which began even before the price surge. The indicator has risen from minus 206,000 BTC on July 23 to nearly zero over the past 30 days. This is the first move into positive territory since February 26. Historically, such dynamics are a bullish signal: the median BTC return 60 days after similar events was 18.1%, with positive results recorded in 78% of cases.
However, not everything is so clear-cut. Glassnode analysts point out that the price is still below the average cost basis of short-term holders, which stands at $75,800. Until this barrier is overcome, on-chain models view the market as being in a capitulation phase, where new buyers show increased confidence, but the market remains vulnerable to macroeconomic shocks.
Key indicator does not confirm a reversal
Additional concern comes from the realized profit/loss ratio. It currently stands at 0.75—significantly below the threshold value of 2, at which a sustained trend reversal is confirmed. Until this metric returns above 2, any growth should be viewed as a local rally rather than a change in market regime.
Looking at the situation overall: a move above key resistance levels combined with rising spot demand could confirm a return to an uptrend. But until then, the latest bitcoin surge remains promising yet unconfirmed.
My expert conclusion: The market is showing a classic short squeeze against the backdrop of positive news, but fundamental on-chain indicators are not yet giving the green light. I would advise investors not to give in to euphoria and to wait for a firm close above $75,800. Only then can we talk about a full reversal rather than a temporary impulse.