Bitcoin’s Sharp Rally: Is a $2 Billion Treasury Buyback Enough to Explain This Move?
Bitcoin has closed higher in each of the last five trading days, with its gain over the past three days reaching approximately 24%. BTC moved above $77,000 today, posting one of its strongest performances in recent weeks. The move was not limited to Bitcoin; Ethereum, XRP, Solana and other large-cap crypto assets also posted sharp gains, following Bitcoin higher.
As a result, the total crypto market capitalization rose to approximately $2.6 trillion. Bitcoin dominance stands at around 60%. This indicates that the rally is not merely a speculative move concentrated in a few altcoins, but reflects strong risk appetite spreading across a broad section of the market.
What Triggered Bitcoin?
The most discussed catalyst behind the latest move was the U.S. Treasury’s decision to increase its long-term Treasury buybacks. The Treasury announced that it would raise the maximum size of long-term debt buybacks per operation from $2 billion to at least $4 billion. The decision created expectations that liquidity conditions in the Treasury market would improve and pressure on long-term yields could ease.
However, an important distinction needs to be made here.
Markets appear to be pricing this development almost like a liquidity injection or a new monetary easing program. Yet this is not a conventional QE program. Moreover, the scale of the operations remains relatively limited compared with the overall size of the U.S. Treasury market.
Therefore, in my view, explaining Bitcoin’s roughly 24% move over the past three days solely through a few billion dollars of Treasury buybacks is not sufficient.
The real story may be that this news became a powerful catalyst in an already heavily positioned market.
Short Squeeze Amplified the Rally
Billions of dollars in short positions were liquidated during Bitcoin’s rise. Total short liquidations over the past two days reached approximately $3.8 billion, and these forced purchases further strengthened the upward momentum.
The mechanism is quite simple:
Price rises → short positions lose money → positions are liquidated → BTC is purchased from the market to cover the liquidations → price rises further → new short positions come under pressure.
Therefore, alongside natural spot demand, it is important not to overlook the role of leverage-driven forced buying in a significant portion of the latest move.
Moreover, Bitcoin’s break above technically important levels caused investors who had previously been expecting selling to reassess their positions. This could allow the move to transition from simple short covering into a second phase where FOMO comes into play.
What Is Happening With Ethereum, XRP and Other Majors?
Bitcoin’s move quickly spread across the altcoin market.
Ethereum has shown a strong recovery in recent days, while XRP moved even more aggressively than Bitcoin. XRP gained approximately 20% over the past 24 hours, while Solana also posted strong gains. On a weekly basis, Ethereum, Solana and XRP have outperformed Bitcoin.
This is important.
There is a difference between the market rising because capital is flowing only into Bitcoin and capital beginning to rotate into higher-beta altcoins after Bitcoin.
We are currently seeing signs of the second scenario.
Bitcoin rises, followed by acceleration in large assets such as Ethereum and XRP, and then Solana and other high-beta coins follow the move. This structure resembles a classic risk-appetite and momentum cycle.
But this is exactly where caution is needed.
This Is Where My Main Doubt Begins
It is impossible to deny that the market has risen. The technical picture has improved significantly, liquidations have cleared sellers, ETF demand has recovered, and optimism surrounding crypto regulation in the U.S. has supported risk appetite.
However, I think it is still too early to put all of this under a single heading and say, “A new bull market has begun.”
The roughly 24% Bitcoin rise over the past three days has been extremely rapid.
In my view, treating the $2 billion Treasury buyback decision as the sole fundamental reason for this move is an overly simplistic interpretation.
The signal coming through the Treasury market, falling yields, pressure on the dollar, ETF flows, technical breakouts, the short squeeze, positioning and FOMO have all overlapped at the same time.
Therefore, the magnitude of the price move may be explained more by the market’s reaction to the news than by the news itself.
Beware of FOMO
The biggest risk is precisely here.
When Bitcoin rises approximately 24% within a few days, it becomes extremely easy for new investors to fall into a “fear of missing out” mindset.
However, positions opened through FOMO have a major problem:
Investors often buy simply because the price is rising, without researching why it is rising.
As long as these types of moves continue higher, everything appears to be working. But when momentum stops, those same positions can quickly turn into selling pressure.
Especially in a rally where billions of dollars in short positions have been liquidated, it is important to remember that part of the move may have been driven by forced position closures. Once the short squeeze ends, how far the market can rise on organic spot demand becomes much more important.
The Possibility of a Sharp Reversal Has Not Disappeared
From my perspective, the most important test of this rally begins now.
Can Bitcoin maintain its gains?
Will ETF inflows continue?
Can capital continue rotating into altcoins?
Will developments in the Treasury market translate into a genuine and lasting improvement in liquidity?
And most importantly, will real spot buyers remain in the market after the short squeeze ends?
The answers to these questions are not yet clear.
Therefore, neither dismissing the current move nor unquestioningly accepting it as the beginning of a new bull market would be correct.
Bitcoin’s rapid rise toward the $77,000-$79,000 region has significantly increased optimism across the market. However, it would not be surprising if volatility also rises substantially following such a sharp move in such a short period.
My approach is therefore clear:
The rally is real. Momentum is strong. But there is not yet enough justification for FOMO.
The market may be pricing the Treasury buyback news, the short squeeze, ETF flows and regulatory optimism all at the same time.
However, a rising price and a sustainable uptrend are not the same thing.
Over the coming days, the key question will not be how much higher Bitcoin can go, but what type of capital is carrying this rally.
Because if the move is being driven largely by leverage, short liquidations and FOMO, the reversal could be just as sharp as the rise.