After dipping toward the mid-$64,000 range earlier this week, Bitcoin staged a fast and forceful recovery, reclaiming more than 6% in under 48 hours. At press time, BTC is hovering just above $68,000, with intraday highs briefly testing the $69,000 zone. The move wiped out a significant portion of recent bearish bets and injected fresh volatility into the crypto markets.
Short Squeeze Triggers Over $400 Million in Liquidations
The rally was largely driven by a classic crypto short squeeze. As Bitcoin bounced off support near $64,500, heavily leveraged traders betting on downside continuation were forced to buy back positions.
Over the past 24 hours, more than $400 million in short positions were liquidated across major derivatives exchanges. Bitcoin futures open interest surged nearly 8%, climbing above $22 billion, reflecting rapid repositioning by traders scrambling to adjust exposure.
Funding rates, which had turned negative earlier in the week, flipped back into positive territory, indicating bullish pressure returning to perpetual futures markets. When funding rates rise alongside price, it often confirms buyers are regaining control.
Technical Breakout Signals Strength Above Key Support
From a technical standpoint, the reclaim of $68,000 is significant. The level previously acted as short-term resistance after Bitcoin pulled back from the $73,000 yearly high.
The bounce from the $64,000-$65,000 support zone confirms that buyers are defending higher lows, a structure typically associated with ongoing uptrends. The 50-day moving average remains above the 100-day average, maintaining a bullish crossover formation.
Momentum indicators also show improving conditions:
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Relative Strength Index (RSI): Climbed from 42 to 58 in two sessions
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24-hour trading volume: Increased approximately 35%
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Spot exchange netflows: Shifted toward mild accumulation
However, the psychological $70,000 resistance level remains the next major hurdle. A clean break and daily close above that threshold could open the door toward retesting the all-time high zone.
Institutional Activity Adds Underlying Support
Beyond derivatives-driven momentum, institutional participation continues to shape Bitcoin’s price action.
U.S.-listed spot Bitcoin ETFs have recorded steady net inflows this week, signaling sustained demand from traditional finance investors. Daily spot volumes have averaged above $3 billion, reinforcing liquidity depth in the market.
On-chain metrics also show:
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Exchange reserves declining approximately 1.8% month-over-month
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Long-term holder supply reaching near-record highs
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Hash rate remaining strong above 600 EH/s
Market Sentiment Shifts From Fear to Cautious Optimism
Crypto sentiment has pivoted noticeably. Earlier this week, traders were bracing for deeper correction toward the low $60,000s. Now, positioning data reflects cautious optimism.
The Crypto Fear & Greed Index has moved back into neutral territory after dipping into fear levels days prior. Social volume around Bitcoin price predictions and short squeeze activity has spiked, signaling renewed retail engagement.
Altcoins are also catching momentum. Ethereum has climbed roughly 4% alongside Bitcoin, while high-beta assets such as Solana and Avalanche posted even stronger percentage gains during the rebound.
Still, volatility remains elevated. Bitcoin’s 30-day realized volatility sits near 55%, underscoring that sharp price swings remain part of the current cycle.
What Happens Next for Bitcoin?
The immediate question is whether this rally represents a sustainable breakout or merely a squeeze-driven bounce.
If Bitcoin consolidates above $68,000 with strong volume and stable funding rates, analysts say the path toward $72,000-$75,000 becomes increasingly realistic. Conversely, failure to hold $66,000 could invite renewed short pressure.
For now, the data suggests momentum has shifted in favor of the bulls. The combination of liquidations, technical strength, ETF inflows, and tightening exchange supply paints a constructive short-term outlook.
Bitcoin reclaiming $68,000 isn’t just a headline it’s a reminder that in crypto markets, leverage cuts both ways. And this time, the squeeze hit hard.
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