Bitcoin jumped above $68,000 on Wednesday, extending a dramatic intraday recovery as risk assets climbed with US government bonds. The largest digital coin cut through the resistance level around $68,000 that has repeatedly tripped up a recovery over the summer, triggering fresh focus on $70,000.
When the market closed, BTC▲$62,630.00 was quoted at about $68,750, up 6.1% on the day. It had opened the day around $64,000-$65,000 and buying accelerated as the day progressed.
Including the advance, the asset managed to hit just under $69,700, or less than 1% below $70,000. Additionally, CoinMarketCap data suggests the 24-hour trading volume during the movement was around $30.7 billion, a more than 42% increase that suggests the advance was met with some increased activity.
The rally came amid rising sentiment in financial markets after the US Treasury said it would at least double the maximum size of operations in the 10- to 20-year and 20- to 30-year key maturity sectors from $2 billion (up from the current maximum of $2 billion) to at least $4 billion between September 9 and November 4.
The announcement helped reverse a small rise in US government bond yields after traders had sold off the bonds. The 30-year Treasury yield had risen to 5.34% on Tuesday, its highest level since 2007, but on Wednesday fell to 5.187% at one stage. The benchmark 10-year yield eased to around 4.65%, with softer long-term yields and gains in a range of risk-sensitive markets, including equities and Bitcoin.
After BTC showed an initial advance on the back of the development, $68,000 had been an important technical level for the summer, with analysts cited by CoinDesk in July calling that a make-or-break level for the advance after Bitcoin had shot higher from depressed price levels. The zone’s clearing now reflects a meaningful change in the short-term price action, but a sustained break above $70,000 has not yet occurred.
The latest spurt followed a multi-week period of hovering under the key support of the mid-$60,000s in August. The sharp price action on Wednesday has traders wondering if buyers can hold above the prior resistance zone of $68,000.
Continued price support above or around $70,000 could signal further momentum, while moves back below the breakout area, which could be around the $70,000 mark, could raise doubts about the rally’s sustainability.
The macro backdrop remains pivotal, with long-dated Treasury yields already rising sharply before Wednesday as concerns over inflation, geopolitical conflict and a longer-term US fiscal outlook weighed on sentiment.
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Reuters reported total public debt was nearing $40 trillion, and the Treasury stated that the larger repurchases were to provide a greater level of liquidity support in longer-dated nominal securities.
Though it doesn’t actually change the amount of government borrowing, it had an immediate impact in the market, with yields dropping, and that is what matters for crypto. Wednesday’s price action was just a manifestation of this correlation; the Treasury decision was part of the overall market, resulting in the rise in Bitcoin price.
