Bitcoin traded above $70,000 on Wednesday for the first time since June 2, before easing to $69,305. The move, up 7.5% in 24 hours, followed policy signals out of Washington and triggered a wave of short liquidations.
The liquidation cascade
CoinGlass data shows 172,202 traders were liquidated over the past 24 hours. Shorts absorbed $2.74 billion in losses, while longs lost just $256.66 million. Bitcoin alone accounted for $1.42 billion of that total.
The numbers are stark. A short squeeze of this size tends to reset positioning, but it also leaves the market twitchy. The question now is whether the rally has legs or just cleared out the bears.
Washington's policy pivot
The trigger came from two directions. The Treasury said it would double its long-end debt buybacks to at least $4 billion each, a move that loosens financial conditions. President Trump then suggested a sizable government purchase of Bitcoin, adding a layer of speculative fuel.
Neither is a done deal. The buyback change is concrete, the government purchase is still a suggestion. But markets traded on the possibility.
Spot demand is turning
CryptoQuant's 30-day apparent spot demand has climbed from -206,000 BTC on July 23 to roughly -5,000. That's approaching positive territory for the first time since February 26.
Historically, when spot demand flips from negative to positive, Bitcoin has posted a median return of 18.1% over the following 60 days, with positive outcomes 78% of the time. The shift isn't there yet — it's close, but not confirmed.
What's overhead
Glassnode's data points to a mixed picture. Bitcoin is trading above the Short-Term Holder cost basis of $68,500, a bullish signal. But the True Market Mean sits higher at $75,800, meaning the average coin holder is still underwater.
The Realized Profit/Loss Ratio reads 0.75, well below the 2 threshold that Glassnode considers evidence of a genuine shift. In plain terms: the rally is real, but it hasn't convinced everyone yet. The next test is whether spot demand flips positive and whether $75,800 becomes a target rather than a ceiling.
