Treasury Blinked. Bitcoin Exploded.

I’m going to take a very small victory lap before we get into today’s newsletter, because I’ve been talking about the possibility of exactly this kind of Bitcoin move on my shows.

For the past few weeks, Bitcoin has been doing absolutely nothing, chopping around the low-to-mid $60,000s and slowly boring everyone to death. But underneath that incredibly boring price action, something much more interesting was happening. Volatility and trading volume had collapsed while open interest remained elevated, meaning a large amount of leveraged exposure was still sitting in the market even though the underlying asset barely moved. I shared tweets highlighting this dynamic on my shows and repeatedly pointed out that it was creating the conditions for an explosive move. I obviously didn’t know which direction it would break or what would eventually trigger it, but when leverage remains elevated while volatility gets crushed, eventually something has to give.

Yesterday, something gave.

And the first catalyst came from a place most Bitcoin traders probably weren’t watching closely enough: the U.S. Treasury market.

Long-term Treasury yields have been ripping higher, with the 30-year recently pushing above 5.3%, its highest level since 2007, while the 10-year approached 4.7%. That might sound like something only bond traders should care about, but long-term Treasury yields sit underneath enormous portions of the financial system. They influence mortgages, corporate borrowing costs, equity valuations, government financing costs, and the relative attractiveness of virtually every risk asset on Earth. When investors can earn more than 5% lending money to the U.S. government, everything else has to compete with that return.

Then Treasury made an announcement.

The Treasury Department said it will at least double the maximum size of its liquidity-support buybacks for longer-dated government bonds, increasing operations in the 10-to-20-year and 20-to-30-year portions of the curve from a maximum of $2 billion to at least $4 billion. The change begins September 9 and runs through November 4.

On its face, this sounds painfully boring. Treasury is going to buy a few billion dollars more of its own old bonds. Great.

Except the bond market moved immediately.

The 10-year Treasury yield dropped from roughly 4.68% to around 4.65%, while the 30-year fell from approximately 5.27% toward 5.20%. The dollar weakened, financial conditions eased at the margin, and suddenly an announcement about something called “liquidity-support buybacks” was moving markets everywhere.

Then Bitcoin moved.

BTC was trading around $65,400 before the announcement really worked its way through markets. It quickly ripped through $67,000 and then exploded toward $69,700, gaining more than $2,000 during the most violent minute of the move.

That last part almost certainly wasn’t Treasury.

It was leverage.

This is where the setup I had been talking about beforehand becomes important. Bitcoin had spent weeks barely moving while open interest remained elevated and volatility collapsed. Perpetual futures trading activity had fallen toward multi-year lows, yet a substantial amount of leveraged positioning remained in the market. That combination didn’t tell us Bitcoin was about to pump, and it certainly didn’t tell us that a Treasury announcement would provide the catalyst. It simply told us that when something finally happened, there was an increasingly good chance it would happen violently.

Treasury appears to have supplied the spark.

Once Bitcoin started moving higher, shorts began hitting their liquidation prices. When a leveraged short gets liquidated, the position has to be closed, creating forced buying into an already rising market. That buying pushes Bitcoin higher, which reaches another layer of liquidation levels, which creates more forced buying, which pushes Bitcoin higher again. What begins as a legitimate market reaction can very quickly become mechanical.

That’s exactly what happened.

During the most violent part of the move, more than $1 billion in Bitcoin shorts were liquidated in roughly an hour, the largest Bitcoin short-liquidation wave in CoinGlass data going back to 2021. Across crypto, approximately $1.07 billion in shorts were wiped out during that same one-hour window. The carnage continued as Bitcoin moved higher, eventually pushing rolling 24-hour short liquidations well above $2 billion. That rolling number continued changing as the rally extended, so I’m less interested in attaching a precise figure to it than I am in what actually happened: an enormous amount of leveraged bearish positioning was forced out of the market in an incredibly short period of time.

The initial chain reaction was fairly straightforward. Treasury expanded its long-bond buybacks, long-term yields fell, Bitcoin moved higher, shorts started getting liquidated, and forced buying turned a rally into an explosion.

Did Treasury’s announcement suddenly make Bitcoin fundamentally worth thousands of dollars more? Probably not. Did Treasury deliver a bullish macro catalyst into a market already structurally primed to explode, triggering an initial move that then set off a historic short squeeze? That explanation makes considerably more sense to me.

Treasury lit the match. The leverage was already sitting there waiting to burn.

But then something else happened.

While everyone was trying to figure out what the hell had just happened in the bond and Bitcoin markets, President Trump was meeting with major crypto executives at the White House and publicly pushing Congress to advance the CLARITY Act, one of the industry’s most important pieces of unfinished legislation. Bitcoin had already been launched higher by the Treasury catalyst and subsequent liquidation cascade, and now the President of the United States was standing alongside some of the biggest names in crypto, reiterating his desire for the U.S. to lead the industry and calling for Congress to finally provide the market structure legislation it has spent years waiting for. And also calling for the United States to buy Bitcoin.

That gave the rally another reason to keep going.

Bitcoin broke through $70,000 and continued toward $72,000 this morning, turning what initially looked like an extraordinary short squeeze into something more complicated. The first violent move toward $69,700 was clearly amplified by forced buying, but the continuation came as the market absorbed an additional, fundamentally positive regulatory catalyst.

So there wasn’t really one story yesterday.

There were three.

Treasury moved first. Leverage amplified it. Washington gave it another push.

And now we need to figure out what any of it actually means.

I’ll see you tomorrow.

DAILY CHART

Bitcoin has spent months flashing signs that the bear market may be nearing exhaustion – the monthly 50 MA, the weekly 200 MA, deeply oversold weekly momentum and bullish divergences across multiple timeframes.

Those signals were important, and I have been screaming about them since February. But they were still largely telling us that Bitcoin was historically cheap and stretched. What we had not seen was a meaningful change in trend.

That may finally be starting.

Bitcoin has launched higher from the daily 50 MA and is now pushing above the daily 200 MA. That red moving average has effectively acted as the ceiling throughout this bear market, which makes this test far more important than another short-term bounce. In prior Bitcoin bear markets, reclaiming the 200-day MA and subsequently holding above it has often been one of the clearest signs that the market is transitioning out of the bearish phase and into accumulation or recovery.

The distinction here matters. A single move above the 200 MA does not magically declare the bear market over – Bitcoin still needs to hold the level and establish higher highs and higher lows. But this is the first time in a long time that price is beginning to do something structurally different rather than simply becoming more oversold.

And it is doing it on serious volume.

The next major level is roughly $82,800, marked in red on the chart. A break above that area would create a meaningful higher high and begin to invalidate the sequence of lower highs that has defined the bear market. That would be the much stronger confirmation that the market’s character has changed.

So the setup is becoming fairly clear: the long-term momentum signals have been telling us for months that a major bottoming process was likely underway. Now price itself is finally beginning to confirm the message. Reclaiming and holding the daily 200 MA is step one. Breaking roughly $82,800 would be the far more important step two.

For the first time in this entire bear market, the bulls have a legitimate opportunity to break the structure that has kept them trapped.

HYPE jumps 11% as Trump says CFTC is working to bring Hyperliquid to U.S.

President Trump said Monday that the Commodity Futures Trading Commission is actively working to bring Hyperliquid, the leading decentralized perpetuals exchange currently unavailable to US users, into the US regulated market. HYPE jumped roughly 11 percent on the news. Bringing a decentralized perp exchange under CFTC oversight would represent the most significant onshoring of an offshore crypto derivatives venue since the industry started rebuilding after the FTX collapse, and would give US retail direct access to perpetual futures products that have driven most global crypto trading volume through 2026.

Metaplanet launching US bitcoin treasury company through $135 million nanocap deal

Japanese bitcoin treasury company Metaplanet announced Monday that it will contribute approximately 2,100 bitcoin worth $132.1 million plus $2.5 million in cash to Nasdaq-listed Super League Enterprise in exchange for a roughly 95.7 percent controlling stake, then rename the entity Superplanet to serve as its dedicated US bitcoin treasury platform. The transaction is expected to close in the fourth quarter of 2026 and gives Metaplanet its first US public equity vehicle after months of internal preparation. The deal adds another publicly listed bitcoin proxy to a US market already crowded with treasury companies operating under increasing mNAV compression pressure.

Ethereum Foundation announces Platåberget testnet as early Glamsterdam preview

The Ethereum Foundation announced Monday the launch of Platåberget, an early public testnet for the upcoming Glamsterdam upgrade that combines the previously separate Gloas and Amsterdam development tracks into a unified release path. The Foundation simultaneously published its Q2 2026 allocation update highlighting consensus-security assessments, networking improvements, formal verification work, and protocol prototyping. Glamsterdam remains scheduled for Q3 2026 mainnet activation with a target throughput of approximately 10,000 transactions per second, though the immediate ETH price response to the testnet launch was modest.

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