Bitcoin nears $80,000 after $4B of shorts liquidated

Bitcoin climbed toward $80,000 after a three-day rally that liquidated more than $4 billion in short positions and pushed the cryptocurrency to a three-month high. The price reached $78,449 before easing to about $77,800 at the time of reporting.

The advance accelerated beginning Wednesday after the U.S. Treasury said it would at least double liquidity-support buybacks for 10- to 30-year government debt, which helped push long-term yields lower. Momentum was further supported by a White House meeting in which President Donald Trump met crypto executives and urged Congress to advance the CLARITY Act, while both the SEC and the CFTC signaled industry-focused proposals.

Derivatives activity magnified the price move. Data from CoinGlass shows traders covering short positions drove more than $4 billion in liquidations since Wednesday as Bitcoin climbed from roughly $65,000 past $70,000 and then above $75,000. Forced buybacks added to demand coming from spot investors and exchange-traded funds.

Institutional demand strengthened during the rally. SoSoValue reported spot Bitcoin ETFs attracted more than $1 billion in inflows since Wednesday, supplying additional spot buying as prices broke through resistance levels. Nansen analysts noted ETF inflows and broader spot demand helped Bitcoin reclaim its 20-week and 200-day moving averages and move above the estimated cost basis for short-term holders near $68,700.

On-chain indicators shifted with the price. CryptoQuant’s Bitcoin Bull Score Index rose to 60, its first return to what the firm classifies as bullish territory since October 2025. Six of the index’s 10 components turned positive, including measures of demand growth, stablecoin liquidity and trader realized price. The index did not reach that level during the earlier rally to about $82,000 in May.

Joao Wedson, chief executive of Alphractal, characterized the recent surge as a relief rally and stated, “a relief rally; nothing has changed yet.” Nicolai Søndergaard, senior research analyst at Nansen, said short covering amplified gains but did not create the advance on its own, pointing to ETF inflows and spot demand as important contributors. He added that funding rates have turned positive and leveraged traders are increasingly crowded on the long side.

Political developments in Washington are affecting market expectations. Lacie Zhang, a research analyst at Bitget Wallet, observed Bitcoin is beginning to trade with a U.S. political premium as the administration pushes for crypto legislation ahead of November’s midterm elections. She noted timing may matter as much as the content of any law, and that failure to pass the CLARITY Act or a slowdown in regulatory momentum after the elections could reduce part of the premium currently priced into Bitcoin.

With a large share of bearish positions cleared, analysts say further gains will depend more on continued spot buying from ETFs and institutional investors rather than additional forced covering. Market participants noted stretched momentum and crowded leverage can make prices more sensitive if spot buying fades.