Bitcoin recently flipped bullish, reclaiming the $69,000 level and surpassing its 200-day moving average for the first time since falling below $100,000 in November. Analyst Scott Melker noted that this breakout above the key long-term market structure test carries added significance after previous attempts were rejected in the second quarter.
On-chain metrics also showed that Bitcoin reclaimed the short-term holder cost basis at $67,000. According to analyst Frank, this movement indicates that market bulls may be regaining control. However, data from Glassnode suggests that a confirmed trend reversal requires reclaiming the True Mean level of $76,000, without which the market remains in a capitulation stage.
The market shift coincided with an announcement from the U.S. Treasury on August 19 regarding plans to double long-end bond buybacks. Beginning September 9, buybacks for longer-dated Treasuries, including 10-year and 30-year coupons, are scheduled to increase from $2 billion to $4 billion. The intervention is designed to reduce borrowing costs as Treasury yields climb, with the 30-year yield exceeding 5% and the 10-year yield trading above 4.6%.
Following the update, Bitcoin rallied 7% alongside gold, reinforcing its status as a debasement hedge against government spending-driven inflation and fiscal debt. CryptoQuant data indicated that the positive correlation between Bitcoin and gold has reached a two-year high, pointing to a broader market regime shift.
The broader cryptocurrency market also registered gains following Bitcoin's surge. Ethereum rallied 17% on Wednesday, while Solana and XRP both recorded 10% increases. Tushar Jain, managing partner at Multicoin Capital, suggested that if the monetary debasement trade holds, the trend could extend and result in substantial outperformance for the digital asset sector for the remainder of the year.
