Bitcoin prices soared after the U.S. Treasury bought back $12.5 billion in treasury bonds

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The U.S. Treasury reportedly bought back $12.5 billion of its own debt to support market liquidity. The buyback has attracted attention because treasury liquidity conditions may affect bond yields and the performance of broader risky assets. Bitcoin traders are watching whether lower yields and looser liquidity conditions can support BTC price momentum.

On September 3, the U.S. Treasury Department completed a $12.5 billion cash-managed debt repurchase operation. As traders assessed the impact of the operation on liquidity, the price of Bitcoin rose above $80,000. The deal is for short-term nominal coupons that expire between October 2026 and September 2028. Source: X Platform

The importance of treasury operations is that repurchase can change the recent dynamics of cash and bill issuance. However, Treasury guidelines describe cash management repo as a debt management tool rather than a monetary stimulus. This difference limits the possibility of direct comparisons with the Federal Reserve's quantitative easing policy.

Bitcoin prices rose while executing a $12.5 billion repurchase

TradingView data showed that the Bitcoin transaction price on September 3 was close to $81,457. The four-hour chart shows that BTC remains above the 20, 50, 100 and 200-cycle exponential moving averages, which are around $78,726,$78,004,$75,866 and $72,360 respectively. The moving average convergence divergence (MACD) also remains positive, with the MACD line above the signal line. Source: TradingView

The U.S. Treasury's August refinancing plan had previously listed the operation on Thursday. The plan sets a maximum purchase amount of $12.5 billion for nominal coupons for one to two years. Settlement is scheduled for September 4, making the deal a planned cash management operation rather than an emergency intervention. CME Group's Econoday calendar also classifies the transaction as a cash managed repurchase. Its data lists the same expiration range and purchase caps. The Treasury uses such operations to manage cash balances and reduce disruption from large financing flows.

The Treasury document also refutes the broader interpretation of liquidity that is often attached to repurchase. Project guidance states that purchased securities will be written off after settlement. The department also views repurchase spending as another source of federal borrowing needs. This means the deal does not reflect the Fed's asset purchases. Quantitative easing expands central banks 'securities holdings and reserves, while treasury repos are the cancellation of selected debts within the government's broader issuance plan.

Despite the liquidity narrative, Bitcoin prices are blocked in the US$83,000 supply area

Glassnode researcher Frederik Theissen wrote on September 2 that Bitcoin is stagnant below the upper supply area. After a short squeeze in August, Glassnode positioned the supply band between $83,000 and $86,000. The company also said the yield on the U.S. 10-year Treasury note had climbed to 4.8%. Source: X Platform

Therefore, Bitcoin's breakthrough of $80,000 means that the price has returned to the previously established resistance zone. Glassnode pointed out that higher sovereign yields remain an important driver of global discount rates. This relationship makes the treasury bond market situation closely related to risky assets. The same study found that at the latest test to May levels, 68% of Bitcoin supply was profitable, compared with 65% in previous tests. Glassnode explained the difference to potentially greater selling supply pressure after summer reallocations.

As a result, after Thursday's rebound, the technical outlook remains mixed. Prices have regained the psychological barrier of $80,000, but the supply area above is still close. To continue to break through the Glassnode range, spot demand is needed that is stronger than a short-term macro response.

Increased leverage of BTC crypto derivatives

TradingView data showed that the trading price of Bitcoin was below US$78,000 on September 2, and accelerated the next day. The four-hour chart shows that BTC is operating above the short-term moving average, with improved momentum. Bitcoin subsequently rose to the $81,000 region on September 3, confirming a stronger breakthrough from the previous trading day's range. These data suggest that leverage remained active during the rebound. As prices approach high-volume areas, an increase in open interest may amplify fluctuations in either direction. But this does not establish that treasury operations were the cause of this increase.

Glassnode's September 2 report also found that short-term option holdings had cooled off from the August squeeze. Seven-day option skewness returned to neutral after traders previously chased call options. Demanda for long-term options remained stable, the company said. This derivative reset reduces evidence of extreme near-term bullish positions. Despite this, options exposure for September is still concentrated above $80,000. Glassnode estimates that open interest around Deribit and BlackRock IBIT as of Sept. 25 totaled about $14 billion. [TAG

Federal Reserve meetings and treasury operations set the next catalyst

Federal Reserve Governor Christopher Waller said on September 3 that inflation remained above the Federal Open Market Committee's 2 percent target. He said improved inflation data could support holding rates unchanged at the Sept. 15-16 meeting. If inflation suffers again, further interest rate hikes may be supported. The Treasury's next planned cash management repurchase is scheduled for September 9, with a similarly capped $12.5 billion. The division also plans to implement a larger long-term liquidity support operation starting from that date. Bitcoin traders now face overlapping treasury flows, inflation data and Federal Reserve policy expectations.