Treasury Buyback Sparks Surprise Crypto Rally, $1.23B in Shorts Wiped Out
Crypto prices surged on Wednesday after a surprise rally saw Bitcoin jump 5.8% to levels above $69,500, wiping out $1.23 billion in bets against it in one hour.
The Treasury announced that it will double its buybacks of long-term government bonds to at least $4 billion per operation, reducing the 30-year yield from 5.337% to 5.192%. This move was seen as a buying signal for risk assets like Bitcoin and other cryptocurrencies.
Ethereum rose 9% to $2,088, Solana increased by 6.5%, and XRP climbed 6.9%. The Crypto Fear and Greed Index moved to 46 on Wednesday, approaching the neutral zone after sitting lower last week.
The surge was fueled by short sellers who were forced to buy back their positions at market price, pushing prices higher and wiping out more shorts. Analyst Michaël van de Poppe said that this announcement 'is a great trigger for the markets,' increasing the likelihood of a bull market.