bitcoin recovered to $67,500 during the US morning session on Wednesday, gaining over 5% in the last 24 hours as the deeply bearish positioning across the crypto market began to unwind.
The move sparked a broader relief rally in altcoins. Ethereum Ether (ETH) rose 10%, reclaiming the $2,000 level for the first time in a week. Solana (SOL), , and chain link each advanced more than 10%, outpacing bitcoin and the gains of the broad market benchmark CoinDesk 20 index.
Wednesday’s bounce follows a period of extremely negative sentiment across the market. The Crypto Fear & Greed Index, a popular sentiment indicator, has been hovering around extreme fear levels for most of February.
Perpetual futures funding rates (the periodic payments between long and short traders) had also turned negative several times over the past few weeks. This means that short sellers have been paying out long positions to maintain their positions, a sign that bearish bets had become saturated. These setups often leave markets vulnerable to strong upward pressure when prices begin to rise.
The bounce has liquidated more than $307 million in leveraged bearish bets on crypto derivatives over the past 24 hours, CoinGlass data shows. Notably, bitcoin perpetual funding rates remain below neutral even amid the rally, suggesting the move is not being driven by aggressive leveraged speculation.
Crypto Stocks Win
Cryptocurrency-related stocks also added to the advance. Stablecoin issuer Circle (CRCL) jumped 20% after beating earnings, while Coinbase (COIN), bitcoin treasury firm Strategy (MSTR), and Galaxy (GLXY) gained between 5% and 6%. Bitcoin miners, increasingly linked to AI infrastructure themes, extended their rally, with Bitfarms (BITF), Bitdeer (BTDR) and MARA Holdings (MARA) leading the gains.
Many cryptocurrency-linked stocks had built up considerable short interest from hedge funds, noted Markus Thielen of 10x Research, leaving them primed for a sharp reversal.
Improved risk appetite in traditional markets has created a favorable context for the cryptocurrency rebound. The tech-heavy S&P 500 and Nasdaq 100 rose 0.6% and 1.1%, respectively, in early trading hours. The software sector, besieged by AI fears, extended its gains, with the iShares Expanded Software-Technology Sector ETF (IGV) rising another 2% during the session.
The first signs of the return of American buyers
For the first time in over 40 days, the Coinbase Premium Index has turned positive again. This index tracks the price difference between bitcoin on Coinbase, a major US exchange, and the broader global market average. It is widely considered an indicator of US capital flows, institutional participation and general market sentiment.
While the MSTR to IBIT ratio has increased 12% year to date, indicating that Strategy has outperformed the BlackRock ETF. This relative strength points to continued risk appetite, even as bitcoin has fallen 25% this year.
Additionally, US spot bitcoin ETFs recorded $257.7 million in inflows on Tuesday, the highest daily total since February 6.
