Bitcoin rose above $70,000 today for the first time since early February, extending the rally and starting to look more like a market reversing momentum after months of intense selling than a temporary relief rally.
crypto slate Data showed Bitcoin rose more than 7% on the day, pushing the flagship digital asset to its highest level in nearly a month. The move comes amid renewed geopolitical tensions surrounding Iran, which continues to increase volatility across global markets.
It’s not just the headline price action that makes the recent rally noteworthy. This is the state of Bitcoin before the rebound began.
Vettle Lunde, head of research at K33 Research, said Bitcoin entered the weekend significantly oversold, heavily shorted and significantly undervalued.
This is important because before the recent escalation in the Middle East created new uncertainties, Bitcoin was already trading on very different terms than gold, stocks, and other major assets.
According to K33, Bitcoin has fallen by 50% due to five consecutive months of price declines. The weekly relative strength index fell to its third-lowest reading on record.
In other words, Bitcoin entered this week in an abnormally high state, but it looked statistically abnormal even before geopolitical stress became the dominant market theme.
This background is at the heart of the reversal debate that is currently taking shape.
Markets Already Ready for a Snapback
The case for K33 was that the positioning became so one-sided that Bitcoin was vulnerable to a sharp rally.
Institutional investors had already significantly reduced their exposure due to selling pressure in previous months.
For context, the Spot Bitcoin ETF endured an outflow of nearly 100,000 BTC, while nominal CME open interest fell 30% from October levels.
This meant that one of the investor groups most likely to use Bitcoin as a hedge against uncertainty has already exited, and some of the assets’ normal correlations may have weakened.
At the same time, crypto-native positioning has become unusually defensive. K33 said funding rates on perpetual futures were unusually low and traders were paying a premium to wait short throughout February.
This is not typical behavior for Bitcoin, an asset that tends to maintain a structural long bias over time.
The company said similar funding rate regimes often emerge during periods of bottoming out, reflecting signs of congestion, imbalances and seller exhaustion.
Notably, the options market was sending a similar message. In February, skew jumped to levels seen only during the worst panic period of 2022, including bankruptcies related to Luna, Three Arrows Capital, and FTX.
There were also signs from the chain. K33 noted that the distribution of long-term holders has subsided as Bitcoin loses support at $75,000 and approaches its 200-week moving average.
Overall, this setup has already absorbed a ton of bad news, washed away leverage and sentiment, and was one of those assets that is poised for a sharp reversal once selling pressure subsides.
Why is resilience important in this macro context?
The reversal theory has gained traction in part because Bitcoin has held up better than some expected, given the widespread stress building around it.
US tensions with Iran continue to escalate and oil and gas trade flows become more complicated, while gas prices in Europe soared more than 70% and South Korean stocks fell another 12% on the day, according to CryptoQuant data.
However, in that environment, Bitcoin broke through $71,000 and regained the $70,000 level.
Its resilience is not interpreted as a random bounce. CryptoQuant said that five days of inflows into spot Bitcoin ETFs over the past six business days supported the market. During this period, cumulative inflows into Spot Bitcoin ETFs exceeded $1.6 billion.
Derivatives are also starting to wake up again. According to CryptoQuant, Binance’s taker-buy ratio reached its highest level this year at 1.18.
The index measures the balance of active buying and selling in the derivatives order book, and the latest readings suggest buyers are beginning to regain control after a long period of dominant selling pressure.
The pace of purchases was remarkable. According to CryptoQuant, taker purchases exceeded $1 billion per hour multiple times a day, contributing to Bitcoin’s rise above $71,000.
Additionally, additional data from K33 showed that the nominal open interest of Binance’s BTCUSDT perpetual contract increased by 7,547 BTC in the past four hours, marking the first four-hour increase since 2023.
What this means is that derivatives traders who have been heavily bearish for weeks are suddenly being forced to react to the strength.
Therefore, if ETF inflows continue and derivatives buyers remain dominant, it would not be surprising to see an uptick in short-term reactions, the company said.
This is where the current story becomes even more nuanced. A rebound does not simply mean that spot demand returns. It’s also how a deeply oversold market behaves when short positions become crowded and aggressive buyers begin to push back.
Reversal signal comes from US demand
Another reason analysts see room for a broader momentum shift is that U.S. investors appear to be starting to re-engage with the market.
especially, crypto slate It was previously reported that US investors are leading the current phase of Bitcoin purchases.
One of the clearest signs came from the Coinbase Premium Index, which turned positive in February 2026. Since then, Bitcoin has risen 15%, regaining $71,000, a level not seen in 27 days, according to CryptoQuant data.
The signal is important because the Coinbase Premium Index is often used as a measure of US-led spot demand.
If it turns positive and maintains that level, it would suggest that Coinbase buyers are willing to pay more than traders in offshore venues, which is often a sign of rising U.S. demand.
In this case, the index turned positive and remained in that zone roughly a week ago on the hourly time frame until the latest bar moved higher.
If the premium remains positive, it would reinforce the idea that this rally is a broader recovery in demand rather than just a squeeze from derivatives.
$70,000 Zone Still Contested
Despite this move, this does not mean the market has cleanly broken through the resistance.
Cryptocurrency analysis firm Glassnode said leverage increased as Bitcoin tested around $69,400, with perpetual open interest posting its largest single-day increase since July 2025.
This level has consistently acted as a rejection zone for BTC during periods of intense profit-taking by traders.
Further, Glassnode added that every time the 12-hour simple moving average of net realized P&L exceeded $5 million per hour, the price stalled and reversed around the highs of $69,400.
In that framework, the market still has demand issues to solve. While buyers are strong enough to push Bitcoin back toward $70,000, they are not yet strong enough to absorb the profit-taking there without hesitation.
The company’s conclusion was clear. Until the profit-taking can be absorbed without triggering rejection, $70,000 remains the upper limit rather than the floor.
This view is largely in line with how analysts at the Bitunix cryptocurrency exchange explained recent movements.
These analysts said: crypto slate They argued that Bitcoin’s rapid rise above $70,000 created what they called a classic liquidity rally.
As a result, they identified the $69,500 to $70,500 area as the most concentrated zone of short pressure and liquidity accumulation.
According to Bitunix, long leverage below $68,000 has been largely eliminated, but secondary liquidity remains around $64,000.
According to that interpretation, the market has already completed the first stage of a long liquidation. The next question is whether the overhead short position will squeeze hard enough to turn the resistance into a breakout.
If repeated tests above $69,000 fail to yield solid acceptance, the zone could solidify into a short-term resistance score and send Bitcoin back into the range, Bitunix said.
On the other hand, if a large breakout absorbs liquidity above $69,800, forced short covering could ensue and volatility could intensify.
Still, it does not guarantee further rise in a straight line.
However, this could mark the first time in recent weeks that Bitcoin is starting to look like an asset with room to maintain upward momentum.
(Tag translation) Bitcoin
