Bitcoin rose above $70,000 today for the first time since early February, extending a rebound that is starting to look less like a brief relief rally and more like a market trying to reverse momentum after months of heavy selling.
CryptoSlate data showed Bitcoin gaining over 7% on the day, lifting the flagship digital asset to its highest level in almost a month. The move came amid renewed geopolitical tension over Iran, a backdrop that has kept volatility elevated across global markets.
What makes the latest bounce notable is not only the headline price move. It is the condition Bitcoin was in before the rebound started.
Vetle Lunde, the head of research at K33 Research, said Bitcoin had entered the previous weekend heavily oversold, heavily shorted, and significantly underowned.
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That matters because Bitcoin was already trading under very different conditions from gold, stocks, and other major assets before the latest Middle East escalation added a new layer of uncertainty.
According to K33, Bitcoin had fallen 50% after five consecutive months of downside price action. Its weekly relative strength index had dropped to its third-lowest reading ever.
In other words, Bitcoin entered the week in an unusually stretched state, one that looked statistically abnormal even before geopolitical stress became the dominant market theme.
That backdrop is central to the reversal argument now taking shape.
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A market already primed to snap back
K33’s case is that Bitcoin was vulnerable to a sharp move higher because positioning had become too one-sided.
Institutional investors had already reduced exposure considerably during the previous months of selling pressure.
For context, spot Bitcoin ETFs had endured nearly 100,000 BTC in outflows, while notional CME open interest had fallen 30% from October levels.
That meant one of the investor groups most likely to use Bitcoin as a hedge against uncertainty had already stepped back, allowing some of the asset’s usual correlations to soften.
At the same time, crypto-native positioning had become unusually defensive. K33 said funding rates in perpetual futures had been unusually low, and that throughout February, traders had paid premiums to sit short.
That is atypical behavior for Bitcoin, an asset that tends to maintain a structural long bias over time.
The firm said similar funding-rate regimes have often appeared during bottoming phases, reflecting crowding, imbalances, and signs of seller exhaustion.
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Notably, the options markets were sending a similar message. In February, skews jumped to levels seen only during the worst panic periods of 2022, including the collapses linked to Luna, Three Arrows Capital, and FTX.
There were signs from the chain as well. K33 pointed to long-term holder distribution subsiding as Bitcoin lost support at $75,000 and approached its 200-week moving average.
Taken together, the setup was one of an asset that had already absorbed a large amount of bad news, washed out leverage and sentiment, and was increasingly positioned for a sharp reversal if selling pressure eased.
Why resilience matters in this macro backdrop
The reversal thesis has gained traction in part because Bitcoin has held up better than some expected, given the broader stress building around it.
Data from CryptoQuant showed that US tensions with Iran have continued to escalate, with oil and gas trade flows becoming more complex, while gas prices in Europe surged by more than 70%, and South Korean stocks fell another 12% on the day.
Yet within that environment, Bitcoin broke above $71,000 and reclaimed the $70,000 level.
That resilience is not being read as a random bounce. CryptoQuant said it was supported by five days of inflows into spot Bitcoin ETFs over the last six trading days. During that period, cumulative inflows into the spot Bitcoin ETFs exceeded $1.6 billion.
Derivatives have also started to reawaken. CryptoQuant said Binance’s taker buy-sell ratio reached 1.18, the highest level of the year.
That metric measures the balance between aggressive buy and sell activity in the derivatives order book, and the latest reading suggests buyers are starting to regain control after a long stretch in which selling pressure dominated.
The pace of buying was notable. CryptoQuant said taker buy volume exceeded $1 billion per hour several times in a single day, helping push Bitcoin above $71,000.
Moreover, additional data from K33 showed that notional open interest on Binance’s BTCUSDT perpetual contract rose by 7,547 BTC over the previous four hours, marking the first four-hour growth of that magnitude since 2023.
The implication is that derivatives traders, who had spent weeks leaning heavily bearish, were suddenly being forced to respond to strength.
So, if ETF inflows continue and derivatives buyers maintain the upper hand, the firm said a short-term reaction higher would not be surprising.
This is where the current story becomes more nuanced. The rebound is not simply about spot demand returning. It is also about the way a deeply oversold market can move when short positioning becomes crowded and aggressive buyers start to press back.
The reversal signal is coming from US demand
Another reason analysts see scope for a broader momentum turn is that US investors appear to be reengaging with the market
Notably, CryptoSlate previously reported that US investors were leading the current phase of Bitcoin buying.
One of the clearest signs came from the Coinbase Premium Index, which turned positive in February 2026. Since then, Bitcoin has risen 15% and reclaimed $71,000, a level it had not seen in 27 days, according to CryptoQuant data.
The signal matters because the Coinbase Premium Index is often used as a gauge of US-led spot demand.
When it turns positive and stays there, it suggests buyers on Coinbase are willing to pay more than traders on offshore venues, often a sign that the US appetite is strengthening.
In this case, the index turned positive and has held that zone roughly one week ago on the hourly timeframe, before the latest leg higher unfolded.
If the premium remains positive, it would reinforce the idea that the rally is not just a derivatives-driven squeeze but a broader recovery in demand.
The $70,000 zone is still contested
Despite these moves, this does not mean the market has cleanly broken through resistance.
Crypto analytics firm Glassnode said perpetual open interest posted its largest daily percentage increase since July 2025 as leverage expanded while Bitcoin tested about $69,400.
That level has consistently served as a rejection zone for BTC during periods of intensified profit-taking by traders.
Moreover, Glassnode added that each time the 12-hour simple moving average of net realized profit and loss rose above $5 million per hour, price stalled and reversed near the $69,400 range high.
In that framework, the market still has a demand problem to solve. Buyers have been strong enough to push Bitcoin back toward $70,000, but not yet strong enough to absorb profit-taking there without hesitation.
The firm’s conclusion was clear. Until that profit-taking can be absorbed without triggering rejection, $70,000 remains a ceiling, not a floor.
That view broadly matches how analysts at Bitunix crypto exchange described the recent move.
These analysts told CryptoSlate that Bitcoin's rapid surge above $70,000 had formed what they called a classic upside liquidity sweep.
As a result, they identified the $69,500 to $70,500 area as the most concentrated zone of short pressure and liquidity buildup.
According to Bitunix, long leverage below $68,000 has largely been cleared, while secondary liquidity remains near $64,000.
In its reading, the market has already completed the first phase of long liquidation. The next question is whether overhead short positions will be squeezed hard enough to turn resistance into a breakout.
If repeated tests above $69,000 fail to produce firm acceptance, Bitunix said that zone could harden into a short-term resistance core and pull Bitcoin back into a range.
On the other hand, if a high-volume breakout absorbs liquidity above $69,800, forced short covering could follow, and volatility could intensify.
Still, that does not guarantee a straight line higher.
However, it would show that Bitcoin is increasingly looking like an asset with room to sustain an upward momentum for the first time in weeks.
The post Bitcoin bears could walk into a brutal short squeeze next as BTC retakes $70k appeared first on CryptoSlate.
