Bitcoin Surges Past $78,000, Liquidates Over $4 Billion in Bearish Bets
Bitcoin's price surged to a three-month high on Friday, climbing above $78,000 and extending a three-day rally that has liquidated over $4 billion in bearish bets.
The cryptocurrency's momentum accelerated after the US Treasury announced it would at least double liquidity-support buybacks for 10- to 30-year government debt, sending long-term yields lower and improving risk appetite.
Institutional demand also strengthened, with spot Bitcoin exchange-traded funds attracting over $1 billion since Wednesday, while derivatives positioning magnified the move as more than $4 billion in Bitcoin shorts were liquidated.
The shift is notable because CryptoQuant's Bitcoin Bull Score Index has climbed back to 60, marking its first return to bullish territory since October 2025. However, Joao Wedson, chief executive of Alphractal, remains skeptical that the current rally marks a durable change in market trend.
Nicolai Søndergaard, senior research analyst at Nansen, told CryptoSlate that short covering amplified the rally rather than created it, adding momentum to demand already coming from ETFs and other spot buyers. However, he also noted that momentum is stretched, funding has turned positive, and leveraged traders are increasingly crowded long.
The market is now watching for continued spot demand as forced short covering becomes a smaller part of the move. Lacie Zhang, research analyst at Bitget Wallet, told CryptoSlate that Bitcoin is beginning to trade with a US political premium as the Trump administration pushes to advance crypto legislation ahead of November's midterm elections.