Bitcoin climbed above $72,500 on Thursday, marking its highest price since late May. The surge came as President Donald Trump called for Congress to advance new cryptocurrency legislation and improving market conditions supported digital assets.
Major cryptocurrencies post significant gains
Bitcoin rose 6.6% to reach $72,644. Ethereum increased 11%, while XRP recorded a 19% gain. The Hyperliquid token jumped 15% after President Trump stated that Commodity Futures Trading Commission Chairman Mike Selig was working to bring the decentralized exchange to the US.
The rally coincided with calls from Trump, several regulators, and key cryptocurrency executives urging Congress to pass the Clarity Act. This proposed bill would classify Bitcoin and other digital assets as commodities instead of securities. A procedural vote on the bill is set for September 15.
In contrast to the strong performance in cryptocurrencies, US equities declined. The Dow Jones Industrial Average dropped 624 points, while the S&P 500 fell 0.71% and the Nasdaq Composite slipped over 1%.
Short squeeze and market liquidity boost Bitcoin
Bitcoin’s momentum followed the largest short-liquidation event to date in cryptocurrency markets. According to data from CoinGlass, $664 million in Bitcoin short positions were liquidated within the last 24 hours.
| Crypto asset | 24h price gain | Shorts liquidated |
|---|---|---|
| Bitcoin | 6.6% | $664 million |
| Ethereum | 11% | Not stated |
| XRP | 19% | Not stated |
Expectations of lower long-term US borrowing costs also contributed to Bitcoin’s rise. The US Treasury announced it would double the size of its longer-term bond buybacks to help arrest climbing yields. Lower bond yields generally favor cryptocurrencies by making traditional interest-bearing assets less attractive and increasing overall market liquidity.
Despite Thursday’s rally in bond yields placing pressure on stocks, cryptocurrencies largely maintained their upward trajectory. Gideon Hyams, chairman and co-founder of STS Digital, remarked that the short squeeze initiated the rally but noted that additional factors were sustaining it.
Squeezes start rallies, but they don’t sustain them, and this one has more behind it than forced buying, said Hyams, highlighting falling long-term yields, renewed ETF inflows, and greater regulatory clarity as supporting elements for Bitcoin’s upward trend.
Nicolai Søndergaard, senior research analyst at Nansen, agreed that increased short covering accelerated Bitcoin’s breakout yet emphasized that strong spot and ETF demand were also critical drivers.
Mini dictionary: STS Digital is a digital asset management and research firm focused on cryptocurrency markets, offering insights and investment solutions tailored to institutional clients.
Key tests ahead for the Bitcoin rally
While the price jumped sharply, analysts are monitoring whether Bitcoin can retain its gains after the impact of the short squeeze fades. Søndergaard noted that the technical outlook for Bitcoin has improved but warned that leveraged long positions are becoming crowded. He suggested that ongoing strong spot buying will be crucial for the cryptocurrency to remain above the $70,000 mark.
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 stated.
Ki Young Ju, founder of CryptoQuant, said demand for Bitcoin has turned positive in both spot and perpetual futures markets for the first time since October 2025’s record highs. However, he pointed out that the current scale of demand is still modest and suggested that if this continues for another month, a new bull cycle could be confirmed.
Technical trends are also drawing attention. Bitcoin is approaching a widely tracked golden cross, where the 50-day simple moving average, now at $64,217, is set to cross above the 200-day average at $68,975. The cryptocurrency is currently above both averages, but continued demand will be necessary for the rally to persist.
