Bitcoin stabilized above $78,000, while “currency devaluation trades” weighed on the US dollar.

Investing.com – Bitcoin briefly touched a more than three-month high on Tuesday before stabilizing above $78,000. Continued uncertainty surrounding the health of the U.S. fiscal situation weighed on the dollar and fueled ongoing inflows into the cryptocurrency market.

As of 9:29 a.m. Eastern Time (9:29 p.m. Beijing Time), Bitcoin, the world’s largest cryptocurrency by market capitalization, rose slightly by 0.1% to $78,644.8, after hitting a three-month high of $81,300.0 during the session.

Tuesday’s gains marked eight of the past nine trading days for Bitcoin, with a significant overall rebound over the past week. Furthermore, short covering provided additional support as the latest Bitcoin rally liquidated large short positions.

The US Treasury’s bond-buying program sparked concerns about currency devaluation, causing Bitcoin to surge.

The core driver of this round of Bitcoin price increases lies in the continued escalation of market concerns about the health of the US fiscal situation and the long-term prospects of the US dollar.

Last week, the U.S. Treasury announced plans to nearly double the pace of bond buybacks in an effort to curb soaring Treasury yields , a move that quickly triggered market alarm.
This move has raised market concerns that the US dollar will be the first to suffer the consequences of the Treasury’s intervention in the bond market, thus triggering the so-called “currency devaluation trade.”

OCBC analysts noted in a research report: “The Treasury’s repurchase announcement has shifted the market narrative from ‘rising yields’ to ‘dollar depreciation,’ pushing the dollar weaker, gold stronger, and increasing breakeven inflation. While comparing this to quantitative easing is somewhat of an exaggeration, rising policy uncertainty and market doubts about the Fed’s independence are continuing to weigh on the dollar.”

Against this backdrop, investors flocked to gold and cryptocurrencies—assets widely regarded as safe havens less affected by bond market volatility.

Bitcoin has benefited particularly from this logic, and its lackluster performance this year has also attracted some bargain hunters.

Bitcoin rally triggers $457 million in short liquidation

According to Coinglass data, Bitcoin’s rebound in the past 24 hours has triggered more than $457 million in forced short covering.

This trend continued from last week, when Bitcoin’s sudden rebound wiped out billions of dollars in short positions.
Other cryptocurrencies also saw large-scale liquidations. According to Coinglass data, the amount of Ethereum short positions liquidated in the past 24 hours reached $112.3 million.

Cryptocurrency Market Update Today: Altcoins Enter a Period of Fluctuation After Recent Surge

On Tuesday, the overall cryptocurrency market saw a slight pullback after a recent surge.

Ethereum, the world’s second-largest cryptocurrency by market capitalization, fell 1.2% to $2,463.0; XRP fell 2.6%.

Solana rose 2.3%, Cardano fell about 3%, and BNB remained basically unchanged.

In the meme market, Dogecoin and $ Trump fell by 2.3% and 7.5%, respectively.