Treasury buybacks spark a short squeeze across crypto

The US Treasury just handed crypto bulls the catalyst they’d been waiting months for. By doubling its long-duration bond buyback program, the Treasury effectively flooded the financial system with liquidity, weakened the dollar, and lit a fuse under a market that had been coiling tighter than a spring since early in the year. The result: a violent short squeeze that ripped through compressed trading ranges and sent Bitcoin surging near $77K. The Fear & Greed Index swung from 29 (Fear) last week to 72 (Greed) in a matter of days, a sentiment reversal so sharp it practically left skid marks. The mechanics behind the move When the Treasury buys back long-duration bonds, it pushes their prices up and yields down. That matters because lower long-term yields make risk assets, including crypto, relatively more attractive. It also injects cash into the hands of bondholders who sold, and that cash needs to go somewhere. The dollar weakened in response, which is the second domino. A softer dollar tends to act as rocket fuel for Bitcoin and other digital assets, partly because it makes dollar-denominated assets cheaper for international buyers, and partly because it signals easier financi...