On Wednesday in U.S. Eastern Time, BTC suddenly rebounded strongly. The price hit a high of $70,059.9, the highest level since early June, and it also recorded the largest single-day gain since March. As the market quickly reversed, a large number of shorts were forced to cover, triggering the biggest wave of Bitcoin short liquidations since 2021, based on available records.

According to Coinglass data, within just about an hour, more than $1 billion worth of Bitcoin short positions were forcibly liquidated. Bitcoin had been falling for months, at one point dropping to just over $60,000, while bearish sentiment continued to build. As the price suddenly turned upward, large amounts of passive buy orders generated by short-covering further pushed the coin’s price higher, forming a typical “short squeeze” pattern.

Multiple positive factors underpinned this rebound. On that day, U.S. President Donald Trump met at the White House with executives from several crypto industry companies, including representatives from $Coinbase (COIN.US)$, Payward, and Blockchain.com Group Holdings, further reinforcing market expectations that the Trump administration would promote a friendlier regulatory environment for digital assets.

At the same time, the U.S. Securities and Exchange Commission (SEC) this week proposed a new plan that would allow some digital-asset issuances to be exempt from submitting a securities registration statement. The SEC said these exemptions are mainly intended for companies in the startup and fundraising stages, aiming to lower financing hurdles for the relevant firms. Previously, U.S. Congress’s progress on legislation to shape the structure of the cryptocurrency market had stalled.

IG chief technical analyst Axel Rudolph said Bitcoin is mainly being driven by short-covering, indicating that buyer confidence is recovering. However, the next challenge for this upswing is whether it can maintain the current momentum and further test the area around $75,000.

FalconX co-head Joshua Lim said that over the past few weeks, the crypto trading market has been largely dominated by sell orders and negative news. However, Bitcoin’s firm performance in the area just above $60,000 ultimately led to a shift in market sentiment and trading logic.

The technical picture also improved notably. The rally on Wednesday pushed Bitcoin back above the 100-day and 200-day moving averages—two widely watched technical indicators by traders. At the same time, the rebound spread across the broader crypto market: Ethereum rose as much as 12% during the day and also logged its largest single-day gain since March.

The positioning distribution in the options market also reflects investors’ bets on key price ranges. According to data from the crypto trading platform Deribit, Bitcoin options investors previously placed heavy downside protection around $60,000, while setting up bullish positions around $70,000. Open interest for the relevant put and call options was highly concentrated around these two strike prices.

In addition to regulatory tailwinds, the U.S. Treasury unexpectedly expanded the size of its long-term Treasury buyback program on Wednesday, becoming an important catalyst for Bitcoin’s rise. U.S. Treasury Secretary Bessent sought to ease pressure from persistently rising long-term funding costs, announcing that the liquidity-support buyback size for Treasury notes with maturities of 10 to 30 years would be increased by at least double.

After the news was released, both U.S. long-term Treasury yields and the U.S. dollar fell, creating a more favorable market environment for risk assets such as Bitcoin. Adam McCarthy, head of research at crypto liquidity and market data firm LO:TECH, said that over the past few weeks, shorting Bitcoin had become relatively concentrated in the market. The policy signal released the same day by the U.S. Treasury clearly boosted investor confidence and triggered a rapid inflow of funds into risk assets such as Bitcoin.

Bitcoin’s surge also lifted crypto-related stocks across the board. One of the largest U.S. digital-asset trading platforms, $Coinbase (COIN.US)$, rose more than 9%; major Bitcoin holder $Strategy (MSTR.US)$ rose more than 12%; and stablecoin issuer $Circle (CRCL.US)$ jumped nearly 10%.

However, U.S. crypto regulatory legislation still carries uncertainty. The (Clear Bill), which aims to establish a regulatory framework for the structure of the digital-asset market, is currently stalled in the U.S. Senate. There are clear differences between Democrats and Republicans on provisions such as moral or ethical standards, and some of the disputes are related to former President Trump’s involvement in the digital-asset industry.

For Bitcoin, the key next step is whether the rapid rally driven by short-covering can be converted into genuinely sustained buying pressure. This squeeze rally shows that bearish positioning was highly concentrated in the market. Once prices reverse, large-scale forced liquidations could reinforce the upward move in a self-amplifying pattern. As Bitcoin once again approaches the $70,000 mark, market attention will shift to whether buying can continue—and further challenge the key area around $75,000.