Bitcoin surged over 7% on Wednesday, briefly crossing the $70,000 mark after several favorable developments pushed digital assets higher. The flagship cryptocurrency reached an intraday high of $70,022, triggering a short squeeze that wiped out $1.23 billion in short positions in an hour.

Other tokens rallied as well, with Ethereum (ETH) up nearly 18%, Ripple (XRP) and Solana (SOL) up over 10%, and Hyperliquid up a staggering 22% over the past 24 hours. 24-hour trading volume is up 177%, and the crypto market cap is up over 8% at $2.37 trillion.

Bitcoin Surges as US Treasury Steps In to Improve Liquidity

Bitcoin (BTC) and the broader cryptocurrency industry rallied on Wednesday after the United States Treasury said it would double the buyback of long-term government bonds to $4 billion per operation. The move means the government will buy its own debt to shore up market liquidity, push long-term yields lower, and weaken the dollar. The decision to double buybacks came after the 30-year yield hit 5.337%, its highest level since 2007, with the announcement driving the yield down to 5.192%.

When yields drop, investors turn to other assets for better returns, with BTC the obvious choice. Unsurprisingly, the crypto market responded in bullish fashion. BTC, which has traded in positive territory since Monday, registered a sharp rally of over 7% on Wednesday, briefly crossing $70,000 before closing at $69,300. Bull Theory highlighted the high levels of capital flowing into precious metals and crypto, stating,

“$1.2 trillion has been added to precious metals and crypto in the last 3 hours. Gold up +3.08%, adding $934 billion. Silver up +3.86%, adding $136 billion. Bitcoin up +8.14%, adding $103 billion. Ethereum up +9.66%, adding $22 billion. This comes as the Treasury announced it will double its bond buybacks, pushing the 30-year yield down from a 19-year high to 5.187%.”

Over $1 Billion Liquidated

The rally triggered a wave of liquidations, with traders who bet against a price rally wiped out. Liquidations crossed $1.23 billion in under an hour, with the 24-hour total reaching $1.57 billion, impacting over 114,000 traders. According to analyst Daan Crypto Trades, BTC saw a short squeeze after crossing the $67,000 liquidation cluster.

“$BTC did indeed see a massive squeeze upon breaching that $67K level and liquidation cluster. We saw a +4% 1-minute candle just now which is more than the biggest daily candle we saw in weeks.”

BTC’s rally comes after it traded between $60,000 and $66,000 for an extended period. Buyers made several attempts to push the price higher, but failed to sustain momentum after breaching $66,000, prompting a wave of leveraged short positions. However, the setup was changed in minutes during the rally, with several traders liquidated.

SEC Proposal Buoys Crypto Market Sentiment

Bitcoin (BTC) has also benefited from favorable regulatory developments, with the Securities and Exchange Commission (SEC) proposing the “Regulation Crypto Assets” framework. The proposal aims to create registration exemptions that allow eligible crypto startups to raise up to $5 million over four years, and eligible issuers to raise up to $75 million in 12 months. The proposal is yet to come into effect, with the SEC giving the public a 60-day window for feedback.

Bitcoin Bull Market?

Whether the rally signals a returning bull market is up for debate. Analyst Michaël van de Poppe believes the decision could trigger a bull market, stating,

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

However, Rekt Capital believes Bitcoin price charts still favor the sellers,

“History suggests Bitcoin is approaching a resistance area it won’t be able to breach at this very moment in the market cycle.”

The flagship cryptocurrency sits well below its October 2025 high of $126,080. Meanwhile, Bitcoin’s funding rate also hit a 20-month high, indicating traders are paying a significant fee to bet on prices pushing higher. However, CryptoQuant data revealed that Bitcoin demand has grown on a 30-day basis, indicating real, not forced buying.

“Spot and perpetual futures demand growth have both crossed back above zero on the 30-day sum. It is the first time in months that the two are positive at the same time.”

Meanwhile, BTC’s rally has continued into Thursday as it tests the $72,000 level, with the price up almost 4% and having reclaimed key technical levels as the market continues to gain momentum.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.