Woofun AI reports that a structural shift in U.S. fiscal policy, specifically routine long-term debt buybacks, is being identified by macro strategist Mark Connors as a primary catalyst for bitcoin (BTC), with Treasury Secretary Scott Bessent signaling an expansion of interventionist measures.

The catalyst emerged on Thursday when Scott Bessent announced to CNBC that the government intends to conduct regular buybacks of long-dated bonds, potentially scaling operations beyond the previously disclosed $4 billion threshold. Bessent emphasized the administration's intent to demonstrate that bond yields are disconnected from underlying fundamentals, stating, "We have a big toolkit." This announcement coincided with the 10-year Treasury yield trading around 4.68%, having risen three basis points during the session but retreating from its intraday peak. In response to these remarks, bitcoin (BTC) surged, nearly touching the $73,000 mark as market participants digested the implications of direct Treasury support.

Connors, who serves as Chief Investment Officer at Risk Dimensions, characterizes this intervention as a critical signal that the government is actively managing pressure from rising long-term borrowing costs. He describes the move as the "first tell" of a broader strategy to stabilize debt markets.

Structurally, high Treasury yields typically divert capital away from risk assets and into government bonds; however, buybacks support bond prices and contain yields, thereby mitigating this capital drain.

Woofun AI data shows that this dynamic is central to Connors' thesis, as easing yield pressure directly reduces the opportunity cost of holding non-yielding assets like bitcoin.

While the initial scale of intervention appears modest, Connors projects a significant expansion in Treasury support over time. He anticipates that monthly purchases could eventually range between $10 billion and $30 billion, a substantial increase from the $4 billion figure initially cited by Bessent. This escalation is driven by the government's ongoing challenge to find sufficient buyers for its debt issuance.

The deeper driver is the necessity for the Treasury to manage liquidity conditions proactively, ensuring that the cost of servicing national debt remains sustainable amid broader macroeconomic uncertainties.

This evolving fiscal landscape has fundamentally revised Connors' outlook for bitcoin (BTC). Previously, he expected BTC to remain subdued until November, adhering to its traditional four-year cycle patterns.

However, the prospect of supplementary leverage ratio (SLR) reforms introduces a new variable. The SLR dictates how much Treasury debt banks can hold relative to their capital; easing these constraints would allow banks to absorb more government bonds. Connors asserts that when such regulatory adjustments occur, bitcoin will begin its ascent toward the $180,000 price threshold. His target range for the cycle extending through 2030 is now set between $180,000 and $360,000.

In the near term, technical positioning around the $72,000 level presents a distinct dynamic for crypto traders. Jim Ferraioli, director of crypto research at Charles Schwab, noted that modeling reveals a large concentration of leveraged bitcoin shorts clustered near $72,000. If BTC maintains its position above this level or breaks through it, traders betting on lower prices may be forced to close positions voluntarily or face liquidation. Since closing a short position requires buying bitcoin, this activity can generate upward price pressure and trigger a cascade of further liquidations, creating a short squeeze scenario.

Despite the bullish macro narrative, regulatory uncertainty remains a critical near-term risk. Connors warns that bitcoin could face downward pressure if the Clarity Act fails to make progress by approximately Sept. 15. He views the legislation as pivotal to market sentiment, noting that "near-term price risk is predicated on Clarity." Connors explicitly states, "I do think we will fall from $72,000 if Clarity doesn't progress from that September 15 date that's laid out," highlighting the fragility of the current price structure in the absence of legislative clarity.