Crypto Prices Surge as US Treasury Doubles Bond Buybacks

The US Treasury's decision to double its bond buybacks has sent shockwaves through the market, leading to a surge in crypto prices. The move, which increases the limit on long-dated bond repurchases from $2 billion to $4 billion, was announced by the institution on August 19.

According to CoinDesk, this news sparked a wave of liquidations among short positions, with over $2.74 billion in positions being closed within 24 hours. This is the largest such event since 2021, and it has contributed to the overall increase in crypto prices.

The US Treasury's decision was met with skepticism by some market observers, who pointed out that it may be a sign of increased government intervention in the bond market. However, others saw it as a positive development for the economy, arguing that it would provide greater liquidity support in the long-dated segment.

Bitcoin has been one of the biggest beneficiaries of this trend, reclaiming its $72,928.7 level and halting just below the 61.80% Fibonacci resistance at $78,505.8. Ethereum also broke through a significant resistance level at $2,371.69, while Solana remains below its own resistance at $96.33.

The short-term holder MVRV ratio for Bitcoin has risen sharply in recent days, indicating that new buyers are now in profit. This could potentially lead to selling pressure from short-term holders who lock in gains quickly.