Traders are spending millions to position for further Bitcoin upside after its staggering rally to $80,000, though demand for downside protection remains firm, according to Laevitas.

Bitcoin is up about 23% this week, on track for its best weekly gain since March 2023, as US Treasury bond buybacks lower yields and boost appetite for risk assets.

A surprise bond buyback triggered a squeeze that liquidated over $4 billion in bearish crypto bets and sent bitcoin past $77,000.

Bitcoin's price surged further on Monday, flirting with $80,000 after U.S. exchange-traded funds had their best week since October.

Bitcoin climbed above $80,000 for the first time since mid-May, extending a 23% weekly rally, its biggest in about three years. The surge reflects renewed optimism around crypto…