Bitcoin surges 8.7% in sharpest rally since March, shifting market sentiment

Bitcoin jumps to highest price since June

Bitcoin rose as much as 8.7% on Wednesday, reaching an intraday high of $69,749. This was Bitcoin’s steepest one-day gain since March 4 and its highest price since June 1. The sudden rally surprised traders who had expected further declines.

The surge followed a U.S. Treasury announcement that it would double its long-bond buybacks starting September 9. These buybacks typically lower long-term interest rates and weaken the dollar, making assets like Bitcoin more attractive to investors.

Key details of the rally

• Bitcoin’s 8.7% gain was its largest single-day increase since March 4.
• The price reached $69,749, the highest level since June 1.
• The U.S. Treasury will increase long-bond buybacks from $2 billion to $4 billion per operation.
• Over $1 billion in short positions were liquidated in a single hour.

Trader predictions shift from bearish to uncertain

On Myriad, a prediction market operated by Decrypt’s parent company, trader sentiment flipped dramatically. Just 24 hours before the rally, predictions heavily favored a bearish decline. After the surge, the odds became nearly even, with traders split on whether Bitcoin’s price would continue rising or fall back.

The shift in sentiment followed the liquidation of over $1 billion in short positions—bets that Bitcoin’s price would drop. These liquidations often force traders to buy back Bitcoin to cover their losses, further driving up the price.

Why the U.S. Treasury’s move matters

The U.S. Treasury’s plan to double long-bond buybacks is expected to lower long-term interest rates. Lower rates reduce the appeal of holding bonds, making non-yielding assets like Bitcoin more attractive. A weaker dollar also makes Bitcoin, which is priced in dollars, cheaper for foreign buyers.

Analysts have described this dynamic as “QE Lite,” referring to quantitative easing policies that increase money supply and often boost risk assets like cryptocurrencies.

What is confirmed

• Bitcoin’s price rose 8.7% on Wednesday, reaching $69,749.
• The U.S. Treasury announced it will double long-bond buybacks starting September 9.
• Over $1 billion in short positions were liquidated in one hour.
• Trader sentiment on Myriad shifted from 70-30 bearish to nearly even.

What is still unclear

• Whether Bitcoin’s price will continue rising or reverse after the rally.
• The long-term impact of the U.S. Treasury’s bond buyback plan on crypto markets.

Sources

• Decrypt