Bitcoin climbed above $71,000 and approached $72,000 over two days in mid-August 2026, breaking free from a six-week trading range and triggering one of the largest waves of short liquidations on record. The advance, which saw the leading cryptocurrency gain more than 10% in 24 hours at its peak, was fueled by a combination of improved liquidity signals from the U.S. Treasury and a cascade of forced buying by leveraged traders.

Treasury Move Sparks Risk Appetite

The rally began after the U.S. Treasury announced it would at least double the size of its long-dated bond buyback operations, raising the maximum per operation from $2 billion to $4 billion. The expanded program, scheduled to run from early September through early November, targets securities in the 10-to-20-year and 20-to-30-year maturity ranges.

The announcement came as the 30-year Treasury yield had climbed to approximately 5.337%, its highest level since 2007. Following the news, yields retreated toward the low 5.2% range. Lower long-term borrowing costs eased pressure on risk assets, supporting gains not only in Bitcoin but also in equities, gold, and other cryptocurrencies.

Bitcoin had spent roughly six weeks confined between about $62,000 and $66,900, with volatility compressing to multi-year lows. That environment encouraged traders to position short near the upper end of the range, creating a dense cluster of liquidation levels between $65,000 and $67,000. Once price cleared those thresholds, the resulting forced covering amplified the upward move.

Record Short Squeeze Unfolds

Data from market analytics platforms showed short liquidations exceeding $3 billion across August 19 and 20. Thursday’s total marked the largest single-day wipeout of short positions in available records dating back several years. In one particularly intense hour, more than $1 billion in short positions were closed, with Bitcoin accounting for roughly half of the two-day short liquidation total, or about $1.65 billion.

Ethereum shorts contributed more than $1.1 billion, while Solana and other major tokens also saw significant forced closures. Across the broader market, total liquidations approached $3 billion, with shorts making up more than 90% of the activity and outnumbering long liquidations by a wide margin. Individual large positions, including several whale accounts on decentralized platforms, were fully liquidated, adding further buying pressure.

The speed of the move stood out. Bitcoin advanced more than $5,000 in a single day at points, briefly trading near $72,000 on some exchanges. Trading volume expanded sharply, and the Fear and Greed index shifted from fear into greed territory as the squeeze progressed.

Broader Market Participation and On-Chain Activity

The advance extended well beyond Bitcoin. Ethereum rose as much as 18% to 20% in 24 hours, reclaiming levels above $2,200 and approaching three-month highs. Solana, XRP, and other large-capitalization tokens posted double-digit percentage gains. Crypto-linked equities also advanced, with several exchange and mining-related stocks rising more than 10%.

On-chain data indicated that short-term holders—wallets holding Bitcoin for less than 155 days—moved approximately 43,300 BTC to exchanges in their largest profit-taking transfer of the year. The spent output profit ratio for this cohort rose above 1, signaling that coins were being sold at a gain relative to their acquisition cost. Previously, the aggregate cost basis for these holders had sat near $68,700, a level that had acted as a near-term ceiling.

Spot Bitcoin exchange-traded funds recorded positive net inflows in the days surrounding the breakout, providing an additional source of demand. Open interest in derivatives markets expanded after the liquidation event, suggesting that new positioning was already rebuilding even as the squeeze subsided.

Policy Backdrop Adds Secondary Support

Hours after the initial surge, U.S. President Donald Trump hosted a White House meeting with crypto industry executives and financial market representatives. During the event, he urged Congress to advance the Digital Asset Market Clarity Act and indicated that regulators were examining a compliant pathway for certain decentralized trading platforms. Remarks about potential U.S. government Bitcoin purchases also circulated.

While these comments arrived after the bulk of the price move had already occurred, they contributed to sustained momentum later in the session. Federal Reserve minutes from the July meeting, released around the same period, showed a divided committee, with some members favoring higher rates if inflation remained elevated. Markets continued to price a high probability of rates remaining on hold in the near term.

Price Action and Near-Term Focus

At the height of the rally, Bitcoin traded at levels last seen in early June, still roughly 40% to 50% below its October 2025 all-time high above $126,000. Technical levels under watch included the former range high near $66,900, now potential support, and resistance zones around $71,300 to $72,000. Ether’s recovery above $2,000 and subsequent extension provided a measure of confirmation for broader risk appetite.

Market participants noted that squeezes of this magnitude often clear leveraged positions quickly, after which sustained advances typically require continued spot demand to absorb any profit-taking. Funding rates remained relatively restrained despite the size of the move, and the futures basis compressed, pointing to spot-led buying rather than purely leveraged extension.

Bitcoin’s ability to hold above $70,000 through subsequent sessions will determine whether the breakout transitions into a more durable trend or gives back a portion of the forced gains once short covering pressure fades.