Bitcoin breaks $75,500 on Treasury liquidity expansion as analysts warn of premature rally
Bitcoin has climbed past $75,500 following a U.S. Treasury liquidity expansion and short liquidations, though analysts warn the move is driven by market positioning rather than fundamental improvements.
Bitcoin traded at $75,560 on Thursday, gaining more than 8.9 percent over the previous 24 hours. The rally pushed the asset past the $75,500 threshold following a U.S. Treasury Department announcement to double liquidity support buybacks for 10- to 30-year nominal coupon securities.
Additional catalysts included a new Securities and Exchange Commission crypto proposal and a White House meeting between President Donald Trump and industry executives. The price action triggered a massive short squeeze, liquidating over $2.75 billion in bitcoin short positions on Wednesday. Coinglass data shows another $783.2 million in positions were wiped out in the past 24 hours, with $747.7 million of those being shorts.
Despite the price surge, market professionals are cautioning that the fundamentals do not fully justify the valuation. Shawn Young, chief analyst at MEXC Research, argued that the market is overreacting to the government's bond market intervention.
"Crypto is giving the Treasury's intervention far more credit than it deserves," Young said. He noted that the bond move forced out short sellers faster than it improved the macroeconomic case for bitcoin. He added that Treasuries are still competing aggressively for the marginal capital the cryptocurrency requires.
Young described the push above $70,000 as premature, suggesting the Treasury announcement acted merely as a trigger for heavily one-sided market positioning. Dominick John, an analyst at Zeus Research, agreed that the short liquidations are temporarily pushing prices higher but are simultaneously depleting a major source of forced buying.
"The real test now is to see if fresh capital steps in and turns a short squeeze into a sustained move," John said. He emphasized that once the crowded short positions are flushed out, the rally must rely on genuine spot demand. Maintaining momentum will ultimately require stronger liquidity and macro fundamentals.
Nevertheless, the broader outlook for the digital asset class remains constructive. John pointed to the potential passage of the Clarity legislation in September as a major catalyst that could translate the current squeeze into sustainable growth.
Market sentiment metrics reflect this shifting tone. The Bitcoin Fear & Greed Index has climbed to 62, marking its highest level since October 2025 and returning firmly to "Greed" territory as investor risk appetite improves.
