Bitcoin Tops $70,000 Amid a Short Squeeze, but 3 Metrics Hold the Real Signal

Bitcoin (BTC) briefly traded above $70,000 yesterday for the first time since June 2. Short liquidations reached $2.74 billion over the past 24 hours.

The rally started with policy signals from Washington. Forced short covering then amplified the move, turning a macro catalyst into a cascade across derivatives markets. Now, a key question arises: Will the rally last?

What Drove the Bitcoin Price Surge?

Two key developments sit behind the price move. BeInCrypto reported that the Treasury will double long-end debt buybacks to at least $4 billion each.

Furthermore, President Donald Trump suggested that a sizable government purchase of Bitcoin has been discussed. 

Those catalysts pushed the price into crowded short positioning. Liquidations then fed the move, because closing a short requires buying, which lifts the price and triggers the next tier.

CoinGlass data shows 172,202 traders liquidated over 24 hours. Shorts absorbed $2.74 billion of that total against $256.66 million in longs.

Bitcoin alone accounted for $1.42 billion. BTC has since eased to $69,305, up 7.5% over the past 24 hours.

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CryptoQuant Says Spot Demand Is Close to Turning

CryptoQuant flagged a recovery in spot demand before the rally. The 30-day apparent spot demand climbed from negative 206,000 BTC on July 23 to roughly negative 5,000. The metric now sits close to positive territory for the first time since February 26. 

The firm said Bitcoin has historically posted gains when spot apparent demand shifts from negative to positive. Over the following 60 days, BTC recorded a median return of 18.1%, with such signals producing positive outcomes 78% of the time across independent, de-clustered events. 

“Spot demand is the signal that works,” the report read.

This leaves Bitcoin at a potential inflection point. A shift toward positive spot demand could determine whether the latest rally develops into a sustained recovery or fades as the current momentum subsides.

Glassnode Points to Levels Bitcoin Has Not Reclaimed

Meanwhile, Glassnode places the Short-Term Holder cost basis at $68,500. Bitcoin trades above that mark. However, the True Market Mean sits higher at $75,800.

“For as long as price remains below the Short-Term Holder Cost Basis, on-chain valuation models will continue to treat the market as capitulating, a phase where new buyers accumulate with elevated conviction while the market remains structurally vulnerable to any adverse macro catalyst,” the firm said.

The Realized Profit/Loss Ratio adds a second brake. That metric reads 0.75, well under the 2 threshold Glassnode treats as evidence of a genuine shift.

“Until this metric reclaims the 2 threshold, any recovery should be treated as a local rally rather than a regime change,” it added.

Bitcoin’s recent move marks a significant recovery, but the on-chain data suggests the rally has yet to prove itself. A sustained move above key on-chain resistance, coupled with positive spot demand, would strengthen the case for a broader recovery. Until then, Bitcoin’s latest surge remains a promising but unconfirmed reversal.

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