US Treasury Repo Plan Unintentionally Boosts Bitcoin by 25%, Short Liquidation Reaches $4 Billion

BlockBeats News, August 22nd. After the U.S. Treasury expanded the size of long-term bond repurchase, the 30-year Treasury yield fell from a 19-year high of 5.34% to around 5.19%. During the same period, Bitcoin surged by about 25%, briefly exceeding $79,000. Approximately $4 billion in cryptocurrency short positions were liquidated, further fueling the rally.

Previously, the U.S. Treasury announced an increase in the size of the longest duration bond repurchase operation from a single $20 billion to $40 billion. Analysts pointed out that this operation is not equivalent to Fed quantitative easing (QE). Its main role is to improve the liquidity of old bonds and optimize the debt structure. However, the market perceives it as a policy support signal for the long-term bond yield.

Analysts believe that the key to this Bitcoin surge is not the repurchase itself, but the fact that the market's previous short positions were overly concentrated. After the decline in the long-term Treasury yield, shorts were forced to liquidate, creating a strong "short squeeze" market.

Meanwhile, the U.S. spot Bitcoin ETF saw a net inflow of about $650 million this week, and Trump once again urged Congress to advance the "CLARITY Act" to further enhance market risk appetite.

Jeff Ko, Chief Analyst at CoinEx, stated that the current key is whether Bitcoin can hold above the 200-day moving average of around $69,000 and turn it from resistance to support. Market participants also warned that if the 10-year Treasury yield rises back above 4.7% and the 30-year yield approaches 5.3%, this round of Bitcoin breakout may face a reassessment.

Bitcoin has now broken through the 200-day moving average and continues to rise. In the next phase, the market will focus on whether it can maintain its upward momentum in a high-yield environment.