BTC Hits $70,000 as Treasury Buybacks Ignite Crypto Rally

Key Takeaways

• Bitcoin briefly reached $70,000 for the first time since June, gaining around 8% in 24 hours.
• Ethereum surged nearly 19%, while Solana and XRP climbed approximately 11% as short positions were liquidated.
• Falling Treasury yields and optimism surrounding US crypto legislation supported the rally, but inflation and interest-rate risks remain.

Bitcoin Price Reaches $70,000 for the First Time Since June

Bitcoin briefly touched $70,000 on Wednesday, August 19, before easing slightly below the psychologically important level. The move marked Bitcoin’s first return to $70,000 since June 2 and one of its strongest daily advances since February.

BTC was trading near $69,500 in early Asian trading on August 20, representing an increase of approximately 8% over the previous 24 hours. The cryptocurrency had started the session near $64,000 before a sharp combination of macroeconomic news, regulatory optimism and short covering accelerated the rally.

The initial catalyst came from the US Treasury’s surprise decision to increase the size of its long-term government bond buyback operations. The announcement pushed long-dated Treasury yields lower, weakened the US dollar and improved demand for risk-sensitive assets, including cryptocurrencies and technology shares.

Bitcoin subsequently broke above the $66,600 technical resistance level that had restricted its price throughout much of August. The move triggered further buying from traders who had positioned for another rejection near the top of Bitcoin’s recent trading range.

Why US Treasury Bond Buybacks Lifted Bitcoin

The US Treasury will increase its liquidity-support buybacks for securities with maturities between 10 and 30 years. The maximum size will rise from $2 billion to at least $4 billion per operation between September 9 and November 4.

The decision followed a sharp sell-off in the US bond market. The 30-year Treasury yield had reached 5.34% on Tuesday, its highest level since 2007, as investors responded to fiscal concerns, inflation uncertainty, geopolitical risk and the growing supply of government debt.

Following the buyback announcement, the 30-year yield fell towards 5.18%, while the benchmark 10-year yield declined to approximately 4.66%. The US Dollar Index also dropped around 0.7%, creating a more favourable short-term environment for dollar-denominated assets such as Bitcoin.

Lower yields can support cryptocurrencies in several ways. They reduce the relative appeal of holding interest-bearing government securities, ease broader financial conditions and encourage investors to consider higher-risk assets.

However, the Treasury’s action should not be treated as conventional quantitative easing. The operation is designed primarily to improve liquidity in older Treasury securities and adjust the maturity profile of government debt. It does not eliminate the US fiscal deficit or remove the need for new debt issuance.

The increase is also small compared with the approximately $32.2 trillion Treasury market. The revised programme adds at least $14 billion of potential long-term buybacks during the current quarter, bringing planned purchases across all maturities to a maximum of around $83 billion.

Ethereum and Solana Outperform as Shorts Are Liquidated

The rally spread rapidly across the wider cryptocurrency market, with several major altcoins outperforming Bitcoin.

Ethereum rose nearly 19% to approximately $2,260, reclaiming the $2,000 level for the first time since early June. Solana advanced almost 11% to around $85, while XRP gained a similar percentage to trade near $1.11. The CoinDesk 20 Index rose more than 10%, highlighting the broad nature of the move.

Part of the unusually sharp advance came from a substantial short squeeze. Short sellers borrow an asset and sell it in anticipation of buying it back at a lower price. When the market instead rises rapidly, those positions may be forcibly closed, creating additional buying pressure.

Approximately $1.4 billion of cryptocurrency short positions were liquidated within four hours of the Treasury announcement. Total liquidations approached $2 billion over 24 hours, with short positions accounting for the overwhelming majority.

Ethereum experienced particularly heavy short covering. Around $457 million of ETH short positions were liquidated during a four-hour period, compared with roughly $171 million in Bitcoin shorts. This imbalance helped Ethereum outperform BTC as traders rushed to close bearish positions.

Cryptocurrency-related equities also participated in the rally. Coinbase shares gained around 11%, while Bullish rose nearly 13%, reflecting improved sentiment across both digital assets and publicly traded crypto companies.

US Crypto Legislation Adds Another Catalyst

The Treasury announcement was not the only factor behind Bitcoin’s rally. Regulatory developments in Washington also improved market sentiment.

President Donald Trump urged Congress to advance a “fair version” of the Digital Asset Market Clarity Act during a White House meeting attended by representatives from Coinbase, Gemini, Ripple and Chainlink Labs.

The proposed legislation is intended to establish clearer responsibilities for US financial regulators and provide a more defined market structure for digital assets. The bill still faces disagreements involving decentralised finance, crypto rewards and government ethics provisions, but a procedural Senate vote is expected on September 15.

The Securities and Exchange Commission has also proposed a new crypto-assets rule designed to provide greater clarity for companies issuing or using digital assets. Together, these developments strengthened expectations that the regulatory environment could become more predictable for the US cryptocurrency industry.

Can Bitcoin Hold Above $70,000?

The $70,000 level is now the immediate resistance area for Bitcoin. Although BTC briefly traded at that price, it quickly moved back below it, suggesting that sellers remain active near the top of the recent range.

A sustained close above $70,000 could strengthen the technical breakout from the inverse head-and-shoulders pattern formed since the June lows. The pattern’s measured target points towards approximately $76,000, although this scenario depends on Bitcoin maintaining support above the former $66,600 resistance level.

Initial support sits near $68,000, followed by $66,600. A decline below the second level would weaken the breakout and increase the risk of Bitcoin returning to its previous consolidation range.

Macroeconomic risks also remain. Federal Reserve minutes showed that several policymakers supported raising interest rates at the July meeting, while many believed tighter policy could become necessary if inflation failed to slow. Renewed increases in Treasury yields or the dollar could therefore challenge the cryptocurrency rally.