Bitcoin rebounded strongly during Wednesday’s U.S. trading session, climbing back above $68,500 and posting a gain of more than 6% over the past 24 hours as heavily skewed bearish positioning across the crypto market began to unwind.
The recovery ignited a broader relief rally among altcoins. Ethereum’s ether (ETH) jumped 10%, reclaiming the $2,000 mark for the first time in a week. Solana (SOL), dogecoin (DOGE), cardano (ADA) and chainlink (LINK) each advanced by more than 10%, outpacing bitcoin and the broader CoinDesk 20 Index.
With the latest surge, BTC has fully reversed the sharp early-week drop that briefly dragged prices below $63,000. The turnaround follows a prolonged stretch of deeply negative sentiment. The Crypto Fear & Greed Index remained stuck in “Extreme Fear” territory for most of February, underscoring the cautious mood that had gripped the market.
Derivatives positioning had also reflected the pessimism. Perpetual futures funding rates — periodic payments exchanged between long and short traders — repeatedly dipped into negative territory in recent weeks. That dynamic meant short sellers were paying longs to hold positions, signaling crowded bearish trades. Such imbalances often leave markets exposed to sudden short squeezes when prices begin to climb.
Over the past 24 hours, nearly $400 million in leveraged short positions have been liquidated across crypto derivatives markets, according to CoinGlass data. Notably, bitcoin’s perpetual funding rates remain slightly below neutral despite the rally, indicating the rebound is not being fueled by aggressive leveraged longs.
Crypto stocks join the rally
The bounce extended to crypto-linked equities. Stablecoin issuer Circle (CRCL) soared 29% after reporting better-than-expected earnings, while Coinbase (COIN) climbed 13%. Bitcoin treasury firm Strategy (MSTR) and digital asset investment manager Galaxy (GLXY) added between 7% and 8%.
Bitcoin miners, which have increasingly traded in line with AI infrastructure themes, lagged somewhat. Bitfarms (BITF) and MARA Holdings (MARA) rose 6%–7%, trailing other crypto equities.
According to Markus Thielen of 10x Research, many crypto-related stocks had accumulated sizable short interest from hedge funds, leaving them vulnerable to sharp reversals once momentum shifted.
Macro tailwinds and ETF flows
Improving sentiment in traditional markets provided additional support. The S&P 500 gained 0.7% in early trading, while the Nasdaq 100 advanced 1.2%. The software segment, previously pressured by AI-related concerns, extended its rebound, with the iShares Expanded Tech-Software Sector ETF (IGV) rising another 2% during the session.
There are also early signs that U.S.-based buyers may be returning to the crypto market. For the first time in over 40 days, the Coinbase Premium Index — which measures the price gap between bitcoin on Coinbase and global averages — has flipped positive. The gauge is widely viewed as a proxy for U.S. institutional demand and capital inflows.
Meanwhile, the performance ratio between Strategy (MSTR) and BlackRock’s spot bitcoin ETF (IBIT) is up 12% year to date, signaling that equity investors remain willing to take on additional risk despite bitcoin’s 25% decline so far this year.
Further supporting the recovery narrative, U.S. spot bitcoin ETFs collectively recorded $257.7 million in net inflows on Tuesday, marking the largest daily intake since Feb. 6.
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