Bitcoin ($BTC) surged sharply after the U.S. Treasury Department expanded liquidity support for the long-term bond market, triggering one of the largest liquidations of short positions since October 2020.
Michael Nadyer, founder of The DeFi Report, pointed out the timing of Bitcoin's recent surge, noting that it occurred shortly after the U.S. Treasury Department announced the expansion of long-term bond buyback operations starting in September.
According to Nadyer, this move can be considered a second 'moderate quantitative easing'—a limited quantitative easing program—which the U.S. Treasury has undertaken in recent weeks to ease pressure on long-term Treasury bonds.
The analyst stated that gold was the first to react to the macroeconomic changes, followed by Bitcoin. However, Nadyer added that a significant portion of $BTC's movement was driven by short position liquidations and changes in market positioning, rather than new and sustained spot demand.
As Bitcoin climbs to the $68,000–$69,000 range, several technically significant levels have come back into focus. Nadyer noted that $68,500 represents the cost basis for short-term Bitcoin investors, $68,800 corresponds to the 21-week moving average, and $69,100 is the 200-day moving average.
Thus, the current movement of Bitcoin's price is considered a decisive factor in determining whether the uptrend will continue.
Nadyer stated that he finds the recent surge notable in connection with the U.S. Treasury's expansion of bond buyback programs and measures to reduce pressure on long-term interest rates, but noted that at this stage, this rise is largely driven by liquidations.
In the analyst's view, the key question now is whether sustainable demand will emerge in the market to support the upward trend. If Bitcoin breaks through the critical resistance levels between $68,500 and $69,100 and turns them into support levels, it could pave the way for a new bullish rally for $BTC.
*This is not investment advice.
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