Crypto Market Adds $120B as Treasury Move Fuels Broad Rally, $1.4B Short Squeeze

The crypto market added roughly $120 billion in value Wednesday as Bitcoin surged toward $70,000 and a wave of liquidations accelerated gains across major tokens. Total crypto capitalization climbed about 5.3% over 24 hours to roughly $2.41 trillion, according to CoinGecko data.

Bitcoin rose more than 6% during the U.S. session, briefly reaching about $69,700, its highest level in nearly three months. Ether climbed above $2,100, while Solana gained around 7% during the initial move. Crypto-linked equities joined the rally, with Coinbase and Bullish both posting double-digit gains.

The move followed a surprise change in U.S. debt-management operations. The Treasury Department said it will at least double the maximum size of liquidity-support buybacks for 10- to 30-year nominal Treasury securities, from $2 billion to $4 billion per operation, beginning September 9 and continuing through November 4. Long-term Treasury yields fell after the announcement, easing pressure that had built during a sharp bond-market selloff.

The program is a Treasury liquidity operation rather than a Federal Reserve asset-purchase program, but the immediate decline in long-term yields coincided with stronger demand for Bitcoin, gold and equities. The 10-year Treasury yield fell toward 4.65%, while the 30-year yield dropped toward 5.2%.

Shorts amplify the breakout

Leverage turned the initial advance into a much sharper move. About $1.4 billion of crypto short positions were liquidated over roughly four hours, according to CoinGlass data cited during the rally. MarketWatch separately reported more than $1 billion in shorts wiped out within a single hour as Bitcoin crossed $69,000.

The squeeze arrived after Bitcoin perpetual volume had fallen to a three-year low even as substantial leveraged exposure remained in the market, leaving positioning vulnerable to an abrupt move.

Treasury’s larger buybacks do not begin until September 9, making Wednesday’s crypto reaction primarily a response to the policy signal and falling yields rather than to cash already entering the bond market.