Bitcoin (BTC) jumped 5.8% to levels above $69,500 on Wednesday, wiping out $1.23 billion in bets against it in one hour. Is the crypto bull market back?

The rally ran market-wide, with Ethereum (ETH) up 9% to $2,088, Solana (SOL) up 6.5%, and XRP (XRP) up 6.9%. One decision in Washington set it off.

A $4 Billion Signal From the US Treasury

The US Treasury said it will double its buybacks of long-term government bonds to at least $4 billion per operation. In plain terms, the government stepped in as a buyer of its own debt.

The timing couldn’t be better for risk assets. The 30-year yield, the interest rate the US pays on its longest debt, had just hit 5.337%. That was its highest level since 2007. The Treasury buyback announcement knocked it back to 5.192%.

Markets read the move as proof that Treasury Secretary Scott Bessent is watching borrowing costs. When yields fall, bonds pay less, and money hunts for returns elsewhere. Bitcoin sits near the front of that line.

Sentiment followed. The Crypto Fear and Greed Index moved to 46 on Wednesday, steadily approaching the neutral zone after sitting lower last week.

How $1.23 Billion in Short Bets Vanished in One Hour

Traders who bet on falling prices, known as shorts, paid dearly. Roughly $1.23 billion of those bets were closed out at a loss within an hour.

Across 24 hours, the billion-dollar short liquidations reached $1.57 billion and hit more than 114,000 traders. Three large wallets on Hyperliquid lost a combined $194 million alone.

Here is why that fuels a rally. When a short bet fails, the exchange buys the asset back at market price. Every forced buy pushes the price higher, which wipes out more shorts. The squeeze feeds itself.

Analyst Michaël van de Poppe argued that the Treasury decision changes the market’s trajectory.

“This is a great announcement and is a great trigger for the markets. #Bitcoin in a bull market, the likelihood of this has increased,” he shared in a post.

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Bitcoin Tags a Fair Value Gap Left by the May Crash

The daily chart carries a warning in itself. Wednesday’s candle ran straight into a fair value gap (FVG), a zone the price crashed through in early June too fast for normal two-way trading. Think of it as a pothole the market skipped on the way down.

Price tends to revisit these zones to fill the imbalance before picking a direction. This gap sits between roughly $67,516 and $70,686. Bitcoin tagged it on Wednesday, reaching an intraday high of $69,500 as of this writing, before easing to $67,996 at press time.

The gap’s midline near $69,110, known as the mean threshold (ME), is the tiebreaker. A daily candle close above it would suggest the rally has further to run.

A rejection would mean the gap has done its job. The inefficiency is filled, and the broader downtrend could resume.

The volume profiles (black for bears and green for bulls) show where traders are positioned on the vertical axis. Based on the chart, more bulls than bears are waiting to interact with BTC price above the gap’s midline, lending credence to the need for the price to close above it.

Such a move could propagate further upside, with the Bitcoin price likely to reach $72,000, almost 6% above current levels.

However, with bears (black horizontal bars) still hovering below the mean threshold, price could remain subdued below $69,000.

Bull Market Signal or Temporary Swing?

The skeptics have numbers too. Bitcoin’s price action still sits roughly 46% below its October 2025 record of $126,080.

“History suggests Bitcoin is approaching a resistance area it won’t be able to breach at this very moment in the market cycle,” analyst Rekt Capital cautioned, suggesting charts still favor sellers.

Borrowed money adds another worry. Bitcoin’s funding rate warning flashed this week after the metric hit a 20-month high. That means traders are paying steep fees to keep betting on higher prices.

Similar readings preceded past pullbacks. Analyst Benjamin Cowen still places Bitcoin’s cycle bottom 69 to 73 days away.

The bulls answer with demand. CryptoQuant data showed Bitcoin demand growing again on a 30-day basis for the first time in months. That suggests real buying, not just forced buying.

The next test is clear. Traders want bulls to defend the $65,000 to $67,000 zone and close a daily candle above $69,110 on Wednesday.

Federal Reserve minutes from the July meeting, due today, could decide which side gets its answer first.

Source: BeInCrypto