Ethereum surged 18% to $2,250 as Bitcoin crossed $69,000, extending a broad crypto market rally that liquidated nearly $1.4 billion in short positions. Every major token except Tron posted double-digit weekly gains, marking the strongest weekly performance across the sector in months.
The rally accelerated following a surprise Treasury announcement that it would double its bond buyback program, a move that sparked risk-on sentiment across markets. The shift in monetary expectations drove investors into higher-beta assets, with crypto benefiting from renewed appetite for growth-oriented plays after weeks of macro headwinds.
Bitcoin's strength above $69,000 triggered a cascade of liquidations across leveraged short positions. The $1.4 billion in shorts wiped out created a feedback loop, pushing prices higher as traders covering losses added buying pressure. Ethereum's 18% weekly jump significantly outpaced Bitcoin's move, suggesting rotation into altcoins as traders regained confidence in riskier assets.
Layer 1 tokens and DeFi protocols rallied hardest. Solana, Polygon, and Avalanche all posted 20%+ weekly gains. Staking tokens also benefited, with Lido DAO pushing higher amid renewed interest in Ethereum staking derivatives as the token climbed above $2,100 resistance.
On-chain data showed retail accumulation across major addresses, though whale movements remained mixed. Exchange outflows for Bitcoin increased, typically a bullish signal suggesting long-term holders moving funds to self-custody. Ethereum saw similar patterns, with large holders reducing exchange balances.
The Treasury's bond buyback expansion addresses inflation concerns and reduces real rates, making zero-yield digital assets more attractive relative to fixed income. This macro backdrop, combined with technical momentum from the short squeeze, created optimal conditions for the rally.
Volatility expanded significantly, with the Crypto Fear and Greed Index jumping from 42 to 65 in two days. Momentum traders loaded leverage positions, setting up potential resistance near Bitcoin's $70,000 and Ethereum's $2,400