The cryptocurrency market, which had been quiet for several weeks, revived as Bitcoin surged nearly 8% in a single day, triggering the largest short squeeze since records began in 2021.
Data from Coinglass showed that more than $1 billion worth of Bitcoin short positions were liquidated within just one hour, pushing Bitcoin’s price up to around $69,500 — its highest level since early June and the strongest single-day gain since March.
According to Bloomberg, analysts say Bitcoin’s move toward the $70,000 mark was driven by forced short liquidations, signaling renewed buyer confidence. However, this rebound must pass a critical test to sustain momentum and challenge the $75,000 resistance level.
This sharp rally also indicates that previously many investors in Bitcoin were bearish, continuously selling and driving the price down to the low $60,000 range over several months.
As the market reversed, rising prices forced those betting on declines to quickly buy back Bitcoin to cut losses. The more they bought back, the faster the price rose, creating a feedback loop known as a "Short Squeeze," where bearish investors are compelled to repurchase assets, further pushing prices higher.
One factor behind Bitcoin’s recent surge was former President Donald Trump, known as a crypto market supporter, who met with executives from several crypto companies—including Coinbase, Payward, and Blockchain.com—at the White House last Wednesday.
Trump stated he is open to proposals allowing the U.S. government to purchase more Bitcoin. Currently, Treasury and Commerce departments are developing frameworks to acquire Bitcoin without increasing government budgets.
This boosted shares of crypto-related companies as well: Coinbase’s stock rose 10%, MicroStrategy—which holds significant Bitcoin reserves—increased 13%, and Circle, a stablecoin issuer, climbed nearly 10%.
Moreover, this recovery extended beyond Bitcoin to other cryptocurrencies. Ether surged as much as 12%, marking its strongest single-day gain since March.
Aside from Trump’s meetings, the U.S. Securities and Exchange Commission (SEC) recently proposed exempting certain digital assets from securities registration requirements. This move is part of advancing the crypto agenda after key legislation has stalled in Congress for years.
The SEC aims to help crypto companies, especially startups raising capital, operate and grow more easily under this framework.
Bloomberg analysts noted that despite weeks of selling pressure and negative news, Bitcoin has held strong above $60,000, gradually shifting investor sentiment and confidence toward the market.
However, the key crypto regulatory bill in the U.S., the "Clarity Act," remains stalled in the Senate due to conflicts between Democrats and Republicans over ethics provisions, partly because Trump has business interests in digital assets.
Meanwhile, U.S. Treasury Secretary Scott Bessent is working to lower the government’s long-term borrowing costs amid rising yields on long-dated U.S. Treasury bonds hitting multi-year highs.
This effort has led to declines in both Treasury yields and the U.S. dollar, positive factors for risk assets such as Bitcoin and tech stocks.
Just two weeks after announcing its bond buyback plan for this quarter, the Treasury recently stated it will at least double the size of its buyback program targeting bonds with maturities from 10 to 30 years to improve liquidity.
Adam McCarthy, Head of Research at LO:TECH, a crypto liquidity and market data firm, said that shorting Bitcoin was popular in recent weeks, but news from the Treasury reignited investor confidence and accelerated buying of risk assets like Bitcoin.
For Bitcoin, the market now must watch whether this rally is driven mainly by forced short-covering due to losses or by genuine renewed buying from confident investors.
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