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Short squeeze lifts prices
Bitcoin surged after the U.S. Treasury announced on Aug. 19 it would at least double the amount of longer-term government bonds it buys back, with the buyback figure increasing from $2 billion to at least $4 billion per operation starting Sept. 9.
“The buyback figure will increase from $2 billion to at least $4 billion per operation starting Sept. 9”
In the same move, the rally coincided with bearish traders quickly liquidating short positions, and CoinGlass said crypto positions worth $1.75 billion were liquidated within the last four hours, including $1.63 billion in short positions and $124 million in long positions.
Bitcoin led the liquidations with $1 billion in short and $31 million in long positions, while Ether stood at $446 million in short and $46 million in long positions and Solana had $41 million in short and $1 million in long positions.
At press time, Bitcoin rose to trade at $67,983.35, up 5.5% over 24 hours, while Ethereum rose 9% to $2,078.44 and Solana rose 5.5% to $81.16.
Regulatory optimism and targets
The rally also fed into renewed debate about where Bitcoin could go next, with Standard Chartered’s Geoffrey Kendrick saying in a Friday note shared with Cointelegraph that there is now a risk his end-year forecast of USD100k is too low.
Kendrick tied the outlook to a path toward the $126,000 all-time high after Oct. 6, writing that “an overshoot towards the all-time high (USD126k) before year-end may be possible,” and pointing to spot Bitcoin ETF inflows recovering.
For Polymarket traders, the odds of Bitcoin reaching $80,000 by December 31, 2026 nearly doubled, with a proposition asking “Will Bitcoin reach $80,000 by December 31, 2026?” spiking 26 percentage points from about 30% to 57% according to Polymarket data.
For context on the market’s recent volatility, Forbes said bitcoin had fallen 27% since the start of the year when prices hovered around the $89,000 mark, and it had dipped as low as $58,111.
What comes next for crypto
The Treasury buyback plan is scheduled to run from Sept. 9 through Nov. 4, and DiarioBitcoin said the announcement reduced pressure in the bond market and triggered gains in cryptocurrencies and gold.
“El nuevo esquema estará vigente entre el 9 de septiembre y el 4 de noviembre”
DiarioBitcoin reported that the yield on the 30-year Treasury bond fell to around 5,19% after reaching 5,34%, its highest level since 2007, and it said short liquidations in crypto surpassed $371 million in just one hour while total liquidations over 24 hours were around $649 million.
Cointelegraph also framed the move as a “not-QE” liquidity play, saying Bitcoin jumped more than 23% toward $79,000 and Ether crossed $2,400 after the U.S. Treasury moved to double certain long-dated bond buybacks.
Looking ahead, Cointelegraph said Standard Chartered expects Bitcoin could reach $100,000 by year-end if it holds above a key technical level of $65,500, and it added that the call depends on BTC holding above $65,500 for the cycle low to be confirmed.