Bitcoin’s 5% Monday surge was fueled by short-covering rather than new inflows, according to an analyst.

Bitcoin rebounded sharply Monday after slipping over the weekend amid reports of U.S. strikes against Iran, climbing to nearly $70,000 before easing back to around $69,000.

The bounce offered relief to bulls following a prolonged multi-month downturn that has cut bitcoin’s price roughly in half and dampened investor sentiment. However, at least one analyst cautions that the move appears driven more by positioning dynamics than by a meaningful return of fresh demand.

Mark Connors, chief investment officer at Risk Dimensions, characterized the rally as a classic short squeeze. According to him, traders who had positioned for further downside were forced to close those bets as prices moved higher, amplifying the upward momentum. He added that geopolitical tensions prompted broader portfolio rebalancing, while a slowdown — or tentative reversal — in spot bitcoin ETF outflows provided an additional tailwind.

Short squeezes can produce swift and exaggerated price moves. When bearish traders rush to buy back borrowed bitcoin to exit losing positions, their buying accelerates the advance, often pushing prices beyond levels justified by underlying fundamentals in the near term.

Still, Connors warned against reading too much into the spike. He does not see the move as the start of a sustained march back toward $100,000 or a decisive break above the key $75,000 resistance zone. Without consistent spot-market inflows, he argued, the rally could fade just as quickly as it materialized.

Derivatives data reinforce that caution. CoinGlass liquidation heat maps show a sizeable $218 million cluster of long positions vulnerable to liquidation if bitcoin falls back into the $65,250–$64,650 range — the area from which Monday’s rally initially took off.

At the same time, open interest has climbed 6% over the past 24 hours, outpacing bitcoin’s 3.8% price gain. That divergence suggests the move is being fueled primarily by leverage rather than organic spot buying. Some traders have already begun trimming positions near the psychologically important $70,000 level.

Conversely, a clean break above $70,000 could set off roughly $90 million in additional short liquidations, potentially providing enough momentum to retest February’s high near $72,000.