By What Pushed Bitcoin Above $72,000?
Bitcoin extended its rally on Thursday, climbing above $72,000 to its highest level since early June after a record wave of short liquidations accelerated gains already supported by stronger spot demand, ETF flows and improving macro conditions.
About $2.75 billion worth of crypto short positions were liquidated on Wednesday, according to CoinGlass data, with Bitcoin accounting for roughly $1.7 billion of the total. The market-wide short squeeze was the largest in CoinGlass’s records, which begin in 2021. Bitcoin traded around $72,345 at publication time as buying continued into a second session.
The rally followed a combination of catalysts, including expanded U.S. Treasury buybacks, lower long-term yields, renewed crypto ETF demand and regulatory developments in Washington. A White House meeting involving President Donald Trump and executives from the digital asset industry also added to optimism around the U.S. policy outlook.
Short sellers were forced to buy Bitcoin as prices moved higher, adding momentum to the breakout. But analysts argue that forced buying alone does not explain the scale of the move.
“Squeezes start rallies, but they don’t sustain them, and this one has more behind it than forced buying,” said Gideon Hyams, chairman and co-founder of STS Digital. He pointed to falling long-term yields, returning ETF flows and a clearer regulatory path in Washington as factors that could help turn the rebound into a longer trend.
Can Bitcoin Hold Above $70,000?
The next test is whether Bitcoin can remain above the $70,000 level after most of the short covering has already occurred. Nicolai Søndergaard, senior research analyst at Nansen, said short covering accelerated the breakout but did not create it, with spot and ETF demand providing additional support.
That distinction matters because liquidation-driven rallies can reverse quickly once forced purchases end. Continued buying in the spot market would provide stronger evidence that investors are willing to accumulate Bitcoin at higher prices rather than simply reacting to leverage being cleared from derivatives markets.
“Sustained acceptance above $70,000 would keep the outlook constructive, while a pullback toward the $69,700–$69,000 area would be a normal test of the breakout rather than an automatic trend reversal,” Søndergaard said.
Leveraged long positions are also becoming more crowded after the rapid advance. If spot demand weakens while traders continue adding leverage, another sharp move could trigger liquidations in the opposite direction.
Investor Takeaway
The short squeeze helped Bitcoin break through resistance, but holding above $70,000 will depend increasingly on spot and ETF demand. Continued buying without excessive leverage would give the rally a stronger foundation than forced liquidations alone.
Is Demand Returning Across The Crypto Market?
Bitcoin was not the only major cryptocurrency extending gains. Ethereum, XRP and other large tokens moved higher, with XRP gaining about 20% over the previous 24 hours as capital spread beyond Bitcoin.
CryptoQuant founder Ki Young Ju said Bitcoin demand had turned positive in both spot and perpetual futures markets for the first time since the October 2025 all-time high. He cautioned that the scale of the improvement remains modest and would need to persist before confirming the start of another bull cycle.
“The scale remains modest, but if this holds for another month, it would be reasonable to conclude that the bear market is over,” Ju said.
The combination of positive spot demand and derivatives activity is important because previous rebounds have sometimes depended heavily on leverage. If both markets continue improving together, Bitcoin could have a better chance of maintaining gains after the liquidation effect fades.
Could The Rally Extend Into The Fourth Quarter?
Trading conditions before the breakout may have amplified the speed of the move. Paul Howard, senior director at Wincent, said the market had been experiencing unusually low volatility and thin liquidity, leaving prices more sensitive to positive catalysts.
“24-hour trading volumes have exploded, rising 5x from the yearly low recorded last weekend,” Howard said. “The low-volatility environment created the perfect tinderbox, where any positive news could be magnified by thin liquidity into outsized price movement.”
The increase in volume will now be watched alongside ETF flows and spot buying. Strong turnover accompanied by sustained demand would make the breakout more convincing, while falling volume after the liquidation surge could suggest that momentum is cooling.
The rally could also influence how investors allocate capital heading into the fourth quarter. Recent market expectations had leaned toward another downturn, leaving bearish traders vulnerable when macro and regulatory news improved at the same time.
For Bitcoin, $70,000 is now the main near-term level. Holding above it would keep attention on whether the market can build a broader recovery, while a move back below the breakout zone would test how much of the rally was supported by lasting demand rather than the record squeeze.