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Why is Bitcoin rising after the US Treasury doubled bond buybacks? What it means for BTC, crypto and inflation
Bitcoin rises after the US Treasury doubles bond buybacks. Lower yields, a weaker dollar and liquidity hopes boost BTC, crypto and gold amid inflation fears.
Bitcoin jumped sharply after the US Treasury announced a major increase in its bond buyback operations. BTC rose about 6% after the announcement, while the broader crypto market also moved higher. The move came as investors saw the Treasury action as a fresh liquidity signal for financial markets.
The US Treasury is doubling the size of its long-term bond buybacks. The Treasury said it will increase liquidity-support buyback operations for longer-dated nominal coupon securities from a maximum of $2 billion per operation to at least $4 billion per operation, according to a Treasury press release.
US Treasury bond buybacks
The new buyback size will take effect on September 9 and continue through November 4, 2026. The program is designed to provide more liquidity and support trading in the US government bond market. Markets reacted almost immediately. Bitcoin climbed about 6%, while Ethereum gained 8%, Solana rose 7% and XRP added about 4%.
Bitcoin price jumps
The main reason behind the crypto rally was the sharp fall in US Treasury yields. The Treasury announcement pushed the 30-year Treasury yield lower from near a 19-year high, Reuters reported. The US dollar also fell, with the dollar index dropping about 0.8%. A weaker dollar and lower bond yields can make assets like gold and Bitcoin more attractive to investors.
Gold also jumped sharply, showing how strongly markets reacted to the liquidity signal. Gold rose about 3.5% to $4,487 an ounce, its highest level since June 4. The Treasury move is being viewed by some traders as similar to “QE Lite.” The idea is that the government is taking steps to improve liquidity in the bond market, which could make financial conditions easier even though the Treasury is not formally announcing a new round of quantitative easing.
Also read: US Treasury doubles debt buybacks to support bond market as yields surge: What it means
Why Bitcoin is rising
That matters for Bitcoin because crypto has historically benefited from easier financial conditions. When bond yields fall and the dollar weakens, investors may become more willing to move money into riskier assets such as cryptocurrencies. The Treasury action is also raising fresh questions about inflation. Peter Schiff argued that the Treasury is stepping in to buy long-term bonds that private investors may not want, while the funding mechanism could ultimately increase pressure on the Federal Reserve.
Schiff also argued that the buybacks could make it harder for the Fed to keep interest rates high. In a post on X, he said that funding the buybacks through short-term debt issuance could increase federal interest costs and widen the deficit. According to Schiff, this could increase pressure for future rate cuts or quantitative easing even if inflation remains high. His argument is that easier financial conditions could add to inflation pressure instead of reducing it.
Bitcoin technical levels
The inflation argument is important because Bitcoin is often viewed as a hedge against currency debasement and inflation. If investors believe governments and central banks will eventually need to provide more liquidity, demand for assets such as Bitcoin and gold can increase. Markets are also watching the risk of stagflation. TD Securities said Treasury liquidity support, a Federal Reserve willing to look through an energy shock and growing stagflation concerns could push real interest rates lower, according to a note cited by Reuters.
Lower real rates are generally positive for assets such as gold and Bitcoin. When inflation-adjusted returns on traditional fixed-income assets fall, investors may look for other places to put their money. Bitcoin also made an important technical move after the rally. BTC climbed to around $68,500, breaking above a descending trendline and the top of its three-month trading range in one session.
Bitcoin's short-term moving averages have now moved below the price. The 20-day and 50-day exponential moving averages are acting as potential support levels, suggesting the short-term trend has improved. The next major technical level is around $71,468. This is the 200-day exponential moving average and could become an important test for Bitcoin if the rally continues.
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Bitcoin 200-day moving average
Bitcoin also briefly moved above its 200-day average, which was around $69,031. Traders closely watch this level because it helps show Bitcoin’s long-term price trend. If Bitcoin stays above this level, it could be a bullish sign. Bitcoin was last regularly above this level in October 2025, when both Bitcoin’s price and its 200-day average were above $100,000, according to CoinDesk.
The rally also triggered a huge wave of liquidations. Data from CoinGlass showed about $1.3 billion in crypto derivatives positions were liquidated in one hour, between 14:50 UTC and 15:50 UTC. More than half of those liquidations involved Bitcoin trading pairs. Ether also saw around $430 million in liquidations as the sudden rally hurt traders who had bet that prices would fall.
Bitcoin's move was especially painful for short sellers. Traders had been betting against BTC after it struggled around the previous range high near $65,000. The sharp move higher forced many of those positions to close. Bitcoin had reached around $69,700 before pulling back. At around $68,500, BTC was still more than 5.5% higher over 24 hours, showing how strong the Treasury-driven move was.
Bitcoin bullish pattern
There is also another bullish technical pattern developing on Bitcoin's daily chart. Market technician Aksel Kibar identified a possible inverse head-and-shoulders pattern developing since the June lows. An inverse head-and-shoulders pattern can signal a potential trend reversal. It has three major troughs, with the middle trough being the deepest. The recovery points between those troughs create a resistance line known as the neckline.
Bitcoin's neckline is around $66,600. BTC recently traded close to that level, around $66,500, according to the technical analysis cited by CoinDesk. A decisive break above $66,600 could confirm the bullish pattern. Kibar said that if Bitcoin breaks and holds above the neckline, the pattern could point toward a measured target of around $76,000. The $76,000 level is based on the technical pattern itself. It is calculated using the distance between the deepest part of the formation and its neckline.
The pattern has been developing since early June. Traders are watching it closely because a confirmed breakout could suggest that Bitcoin has finally started building a new uptrend after its sharp decline from last year's highs. Bitcoin previously peaked near $126,000 in October 2025. The current technical structure is therefore being watched as a possible sign that the prolonged bear-market phase could be ending.
What is next for Bitcoin?
The key question now is whether Bitcoin can hold its gains. A move above the $66,600 neckline and the $69,031 200-day SMA would strengthen the bullish case, while failure to hold those levels could bring Bitcoin back toward earlier support. The Treasury announcement does not automatically mean Bitcoin will keep rising.
The rally is being driven by a combination of lower Treasury yields, a weaker dollar, stronger liquidity expectations and improving technical momentum. For crypto investors, the Treasury move matters because it changes the market's expectations about liquidity. If financial conditions continue to become easier, Bitcoin and other cryptocurrencies could benefit. But if inflation stays high and forces the Fed to remain restrictive, that could limit the upside.
In simple terms, investors see the US Treasury’s bigger bond buybacks as a possible boost for money in the market. Lower bond yields and a weaker dollar have also pushed investors toward gold and Bitcoin. Bitcoin moving above important price levels has added to the positive outlook.
For Bitcoin, traders are watching $65,800, $66,600, $69,031 and $71,468. Staying above the first two levels could keep the positive trend going. If Bitcoin stays above its 200-day average, the rally could become much stronger.
The bigger inflation question remains unresolved. If the Treasury's actions eventually lead to easier financial conditions and more pressure for Fed rate cuts or liquidity support, investors could worry about inflation returning. That could further increase demand for assets such as gold and Bitcoin — but it could also create volatility across markets.
