Bitcoin Surges 3% Amid Macro Shifts, Short Squeeze, and ETF Inflows
Bitcoin's price surged 3.03% over the past 35 hours, driven by macro factors and exchange-traded fund (ETF) inflows, not a single event.
The U.S. Treasury's decision to double long-dated bond buybacks has weakened the dollar, pushing investors towards Bitcoin and gold as hedges in what is known as the 'debasement trade'. This move, combined with concerns over U.S. debt sustainability and geopolitical risks, has rekindled interest in safe-haven assets like Bitcoin.
A recent short squeeze on Bitcoin saw over $3 billion in shorts liquidated in 24-48 hours, resetting market positioning and leaving fewer aggressive shorts to cap the upside. Derivatives data shows a more balanced environment, with open interest elevated but cooling off, and average funding rates normalizing.
Strong spot Bitcoin ETF inflows of $1.6-1.9 billion over the past week have also supported demand, along with whale accumulation and a less hostile U.S. policy tone. President Trump has urged Congress to pass the CLARITY Act, while regulators have floated crypto-specific rule proposals, reducing regulatory overhang.