Bitcoin has reclaimed the $70,000 level after dropping to nearly $60,000 earlier this month, advancing roughly 5% in the past 24 hours. The broader CoinDesk 20 (CD20) index rose 6.2% over the same period, signaling a wider rebound across major digital assets.
The recovery was sparked by a softer-than-expected U.S. inflation reading. January’s Consumer Price Index came in at 2.4% year-over-year, below the 2.5% forecast, strengthening the case for earlier interest rate cuts. Expectations of looser monetary policy tend to support risk assets, as declining yields on safer investments make equities and cryptocurrencies more attractive.
On prediction market Kalshi, traders now assign a 26% chance to a 25-basis-point rate cut in April, up from 19% earlier in the week. Odds on Polymarket have similarly climbed, rising from 13% to 20%.
Despite the price bounce, investor sentiment remains fragile. The Crypto Fear & Greed Index continues to sit in “extreme fear,” a level last seen during the 2022 bear market triggered by the collapse of FTX. The index has remained in that territory since the start of the month, underscoring persistent market anxiety.
Analysts at Bitwise Asset Management reported that $8.7 billion in bitcoin losses were realized over the past week — a total exceeded only during the unwind of Three Arrows Capital. The firm described the sell-off as resembling a classic capitulation event, where holdings shift from weaker participants to longer-term investors, a transition that historically precedes stabilization but takes time to play out.
At the trough, bitcoin treasury companies were nursing more than $21 billion in unrealized losses, a record high. With the latest rebound, that figure has narrowed to approximately $16.9 billion.
Relatively thin weekend trading volumes may be amplifying the move higher, alongside signs of seller exhaustion following last week’s heavy liquidation wave. Still, fear appears to be the dominant market force. As Bitwise research analyst Danny Nelson told CoinDesk, concern that prices could move lower continues to shape investor behavior.
That lingering caution has led some market participants to use rallies as exit opportunities. Whether the gradual rotation toward higher-conviction holders can shift momentum sustainably remains uncertain.
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