Bitcoin climbed back above the $70,000 level, extending its rebound from a sharp selloff earlier in the week that briefly rattled confidence across digital asset markets. The recovery comes as global risk sentiment stabilizes following Thursday’s crash, with investors reassessing leverage, macro signals, and the resilience of crypto demand amid persistent volatility and evolving regulatory dynamics.
Market Reaction: Bounce Gains Traction After Forced Deleveraging
Bitcoin rose nearly 6% over the past 24 hours, recovering a portion of the losses triggered during Thursday’s abrupt downturn, when prices fell more than 10% intraday and wiped out an estimated $750 million in leveraged positions. Spot volumes increased by roughly 32% during the rebound, suggesting renewed participation rather than a purely mechanical short squeeze, while derivatives data showed open interest stabilizing after a steep decline. Ethereum also participated in the recovery, gaining around 5%, though broader altcoin performance remained mixed, reflecting selective risk re-engagement rather than broad-based optimism.
Macro Backdrop: Risk Sentiment Improves but Remains Fragile
The rebound coincided with a modest easing in broader risk aversion as U.S. equity futures steadied and volatility indicators retreated from recent highs. However, U.S. Treasury yields remain elevated, with the 10-year holding near 4.3%, continuing to pressure non-yielding assets and cap upside enthusiasm. Market participants noted that while Thursday’s crash appeared exacerbated by positioning and thin liquidity, the recovery does not yet signal a clear shift in macro conditions, leaving crypto assets vulnerable to renewed swings tied to rate expectations and dollar strength.
Structural Support: ETFs and Spot Demand Provide a Floor
One factor underpinning Bitcoin’s ability to reclaim the $70,000 threshold has been continued, albeit uneven, support from spot market demand and exchange-traded products. While inflows into Bitcoin ETFs slowed earlier in the week, they have not reversed materially, helping absorb some of the selling pressure generated by derivatives liquidation. Analysts note that this structural demand has altered market dynamics compared with previous cycles, reducing the likelihood of prolonged freefall but not eliminating short-term volatility during periods of stress.
Investor Sentiment: Tactical Buying Replaces Aggressive Leverage
Investor behavior following the crash suggests a shift toward tactical accumulation rather than renewed leverage. Funding rates across major perpetual futures markets have normalized after briefly turning deeply negative, indicating that excessive bullish positioning has been flushed out. Options markets show increased interest in short-dated upside calls alongside continued demand for downside protection, reflecting cautious optimism tempered by risk awareness. Institutional desks report that many participants are using pullbacks to rebalance exposure rather than chase momentum, signaling a more disciplined approach to crypto risk.
Looking ahead, Bitcoin’s ability to hold above $70,000 will be closely watched as a test of post-crash confidence, particularly as macro data and central bank guidance shape broader market direction. Sustained upside would likely require stable ETF inflows and improving global risk appetite, while renewed volatility could prompt further consolidation. For crypto investors, the rebound highlights both the market’s growing structural support and its continued sensitivity to leverage and macro-driven sentiment shifts.
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