Bitcoin tops $71,000 as $3 billion short squeeze breaks six-week range

Bitcoin rose 11% to $71,868 on Aug. 20, breaking a six-week range between $62,000 and $66,900 as $3 billion in short positions were liquidated.

The move was mechanical rather than narrative-driven, according to Coinglass data. BTC spent six weeks between roughly $62,000 and $66,900 with volatility grinding down to multiyear lows, a setup that encouraged traders to fade every approach to the range high. That left a thick band of short liquidation levels between $65,000 and $67,000.

The U.S. Treasury's announcement that it would at least double long-dated buyback operations to $4 billion pulled the 30-year yield back from 5.337%, its highest since 2007. The resulting bid in risk assets was enough to clear the ceiling. Once that fell, $3 billion of shorts were force-bought back into thin resting supply, carrying bitcoin up more than 8% inside an hour. Short liquidations totaled $3 billion over 24 hours against $263.5 million on the long side, with BTC accounting for $1.67 billion and ETH $1.14 billion, the largest short liquidation event since at least 2021.

President Donald Trump's comments hours later — urging Congress to pass the Clarity Act, floating sizable U.S. bitcoin purchases and revealing regulators are exploring a compliant route for Hyperliquid — gave the rally a second leg, lifting bitcoin above $70,000. The next test is whether spot demand can hold the breakout above the $70,000-$72,000 zone, with the 200-day EMA at $71,711 and R1 pivot at $71,966 forming the immediate resistance cluster.

Derivatives positioning shows leverage rebuilding

The aggregated long-short accounts ratio for BTC fell to 0.835 from around 1.05 on Tuesday, meaning more accounts were positioned short into the break than long. That skew was one of the factors that turned a technical breakout into a $3 billion unwind. Open interest rose 9.11% to $131.25 billion, with BTC up 7.18% to $23.4 billion and ETH up 12.36% to $13.2 billion, according to Coinalyze. Notional exposure is being rebuilt quickly after the flush rather than sitting on the sidelines.

Funding rates remain restrained given the scale of the move, with BTC at 0.0101% and ETH at 0.0103%. The absence of elevated funding suggests the leverage build-up that typically follows a squeeze this size has not yet arrived. The BTC futures basis compressed, with the August 28 OKX contract at 7.68% annualized and the September 25 Deribit contract at 4.71%. Spot buying is leading futures, a cleaner signal than a leverage-driven extension.

Ether leads altcoin surge as dominance climbs

Ether at $2,270 is just below Wednesday's three-month high after gaining 19% in 24 hours. SOL, XRP and DOGE all posted double-digit advances. Coinbase's Fear and Greed index jumped to 59, a "greed" reading, from 41, "fear," while bitcoin daily trading volume is up 250% at $59 billion.

Bitcoin dominance climbed to 59.2%, with capital concentrating in the largest cryptocurrencies. CoinMarketCap's Altcoin Season indicator fell to 36/100 from 44/100 on Wednesday. HYPE rose 21.9% over 24 hours to $71.12 after Trump said regulators are working on a U.S. pathway for the exchange, while LIT advanced 26.5% to $2.92 and ETHFI gained 5.68% at $0.5566.

The rally has more than one driver, giving Bitcoin a stronger foundation than a move driven purely by short covering. The Treasury's decision to double long-dated bond buybacks pushed the 30-year yield down from 5.337% to around 5.20% and sent the dollar index to a three-month low. Lower yields and a weaker dollar generally improve conditions for risk assets, including Bitcoin. Still, the $4 billion buybacks are small relative to the roughly $32 trillion Treasury market and do not resolve concerns around deficits, inflation or government borrowing. The next leg of the rally may depend on whether Treasury yields remain lower, the dollar stays weak, and Bitcoin can hold its newly reclaimed levels above $70,000.

This article is for informational purposes only and does not constitute investment advice.