Bitcoin Surges Above $72,000, Liquidating $3B in Short Bets
In brief
- Bitcoin climbed above $72,000 on Thursday, gaining nearly 15% since Monday and hitting its highest price since June.
- $3 billion in crypto short positions were liquidated during the rally, the largest liquidation event since 2021.
- Spot Bitcoin ETFs recorded their largest single-day inflow since May, pulling in $517 million on Wednesday.
- Analysts attribute much of the rally to liquidations and short squeezes rather than sustained new buying.
- Spot demand growth must replace forced position exits for the rally to sustain momentum.
The Squeeze
More than $3 billion in crypto short positions were liquidated during the rally—the largest liquidation of short positions since at least 2021. The violence was concentrated: more than half of Wednesday's gain occurred within a single hour as traders were forced out of a one-sided short position.
That speed matters. Spot Bitcoin ETFs pulled in $517 million on Wednesday, their largest single-day inflow since May, but the bulk of the move came from liquidation cascades, not deliberate buying.
What Drove It
Julio Moreno, head of research at CryptoQuant, attributed the rally to U.S. Treasury buying long-dated government bonds and President Trump suggesting the U.S. government could purchase Bitcoin. Those macro catalysts were real. But they lit a fuse on an oversized short position.
Adam McCarthy, a researcher at crypto trading firm Lo:Tech, agrees. He notes that the short positions that helped drive Bitcoin higher have largely been cleared. The fuel spent, the question becomes: what's next?
The Technical Setup
Bitcoin's chart looks healthier than it did days ago. The token reclaimed its 200-day simple moving average around $69,000, and its MACD, a momentum indicator used to track changes in price trends, has turned bullish. Bitcoin also sits about 8% above its 20- and 50-day moving averages.
Yet Nicolai Sondergaard, Nansen Senior Research Analyst, sounds a cautionary note: much of the rally was driven by liquidations rather than sustained buying.
The Road Ahead
The largest risk is that this was a short-squeeze spike, not fresh sustained buying.
Moreno sees a path forward. The rally may be sustainable if spot demand growth continues after the initial impact of these macro events. He's watching Bitcoin's 365-day moving average, currently around $83,000, as a longer-term anchor.
Still, officially the market is still in a bear market and a price pullback is possible, Moreno cautioned.
McCarthy is tracking two signals: the 30-year Treasury yield (particularly whether it moves back toward 5.3%) and crypto funding rates. Both will tell whether real money is entering or whether dealers are hedging gamma risk at $70,000 in ways that amplify swings both directions.
Frequently asked questions
What caused Bitcoin to jump above $72,000?
Bitcoin rallied due to U.S. Treasury buying long-dated government bonds and comments from President Trump about potential government Bitcoin purchases. However, analysts say much of the move was driven by the liquidation of over $3 billion in short positions—the largest squeeze since 2021—rather than sustained new buying.
Is the rally sustainable?
Analysts are split. Julio Moreno says the rally may be sustainable if spot demand growth continues after the initial macro impact. However, Nicolai Sondergaard warns the largest risk is that this was a short-squeeze spike rather than fresh buying, and Adam McCarthy notes the short positions that fueled the move have largely been cleared.
What are analysts watching now?
Moreno is tracking Bitcoin's 365-day moving average (currently around $83,000). McCarthy is watching the 30-year Treasury yield and crypto funding rates for signs of sustained buying, and noting that if dealers are short gamma at $70k, hedging will exaggerate moves in both directions.
