Bitcoin Surge Triggers Record-Breaking Largest Short Squeeze in History, Single-Day Volume Sets New High

Bitcoin surged 6% to $68,000 on Wednesday, triggering the largest single-day short liquidation event in Bitcoin's history after the U.S. Treasury doubled its long-term bond buyback operations.

What Actually Happened

The Kobeissi Letter reported on X that traders liquidated $1.2 billion in Bitcoin short positions within just 60 minutes as BTC surged above $68,000.

Crypto analyst Byzantine General independently confirmed multiple sources, noting Bitcoin set the largest single-day short liquidation event in history. He wrote on X: "It's impossible to overstate how crazy this is."

What Triggered the Move?

Joe Consorti posted on X that Bitcoin was directly boosted by the Treasury's announcement to buy back $4 billion in long-term debt to increase liquidity support. "Welcome back, money printer," Consorti wrote.

The Treasury doubled its bond buyback operation from $2 billion to at least $4 billion for 10- to 30-year maturities, as reported on Wednesday.

Traders immediately interpreted the move as inflationary and favorable for hard assets, driving yields lower and pushing the U.S. dollar index down 0.8%.

Why Was This Brewing?

CryptoQuant posted on X that Bitcoin's spot demand was about to turn positive for the first time since February, a signal that has historically produced a median return of 18.1% over the following 60 days, with a win rate of 78%.

At current depressed valuation levels, the win rate climbs to 87%.

Meanwhile, Bitcoin ETFs absorbed $485.85 million on Monday and Tuesday, fully recovering last week's outflow of $389.71 million.

According to SoSoValue data, BlackRock's IBIT dominated Tuesday's trading, absorbing $143.57 million, accounting for nearly 76% of total inflows.

BTC Price Prediction: Technical Analysis

BTC decisively broke out of a three-month consolidation range on Wednesday, clearing a cup-and-handle pattern formed since the late-June low of $56,000.

The Relative Strength Index reached 71.70, the sharpest reading since the June top, confirming genuine momentum. The measured target points to $71,400, almost perfectly aligned with the 200-day moving average at $71,489.

Key BTC Levels:

$71,400 to $71,500 — Measured target and 200-day moving average

$66,364 — 100-day moving average, first support on any pullback