Bitcoin briefly traded above $70,000 yesterday, marking its highest level since June 2. The upward move was driven by policy signals from Washington and amplified by a cascade of liquidations across derivatives markets.
Two primary developments initiated the price surge. Reports indicated that the Treasury plans to double long-end debt buybacks to at least $4 billion each, and President Donald Trump suggested that a sizable government purchase of Bitcoin had been discussed.
These catalysts pushed the price into crowded short positions. CoinGlass data indicates that 172,202 traders were liquidated over a 24-hour period, with shorts absorbing $2.74 billion out of a total $2.74 billion compared to $256.66 million in long liquidations. Bitcoin alone accounted for $1.42 billion of the liquidations. Following the surge, BTC eased to $69,305, maintaining a 7.5% gain over a 24-hour period.
Spot Demand Nears Positive Territory
According to data from CryptoQuant, a recovery in spot demand preceded the rally. The 30-day apparent spot demand rose from a negative 206,000 BTC on July 23 to approximately negative 5,000 BTC, bringing the metric close to positive territory for the first time since February 26.
Historical data from the firm shows that Bitcoin has generally posted gains when spot apparent demand transitions from negative to positive. Across independent events, such signals have historically produced positive outcomes 78% of the time, resulting in a median return of 18.1% over the following 60 days.
On-Chain Metrics Offer Caution
While spot demand shows signs of recovery, Glassnode data highlights specific on-chain levels that Bitcoin has not yet reclaimed. Although Bitcoin trades above the Short-Term Holder cost basis of $68,500, the True Market Mean sits higher at $75,800.
Glassnode noted that while the price remains below the Short-Term Holder cost basis, on-chain valuation models treat the market as capitulating. In this phase, new buyers accumulate while the market remains vulnerable to adverse macro catalysts.
Additionally, the Realized Profit/Loss Ratio stands at 0.75, remaining well below the threshold of 2 that Glassnode considers indicative of a genuine market shift. Until the metric reclaims that level, analysts suggest the recovery should be viewed as a local rally rather than a broader regime change.
