Bitcoin rebounded to $67,500 during Wednesday’s morning session in the United States, gaining more than 5% in the past 24 hours as deeply bearish positioning in the crypto market began to unravel.
The move sparked a broader relief rally among altcoins. Ethereum Ether (ETH) surged 10%, returning to the $2,000 level for the first time in a week. Solana (SOL), , and chain link each rose more than 10%, outperforming bitcoin and the benchmark CoinDesk 20 index’s gains.
Wednesday’s rebound follows a period of extremely negative sentiment in the market. The Crypto Fear & Greed Index, a popular sentiment indicator, has hovered in extreme fear levels for most of February.
Funding rates for perpetual futures contracts – the periodic payments between long and short traders – had also turned negative several times in recent weeks. That means short sellers paid out long positions to maintain their positions, a sign that bearish bets had become crowded. Such setups often make markets vulnerable to severe stress when prices begin to rise.
The rebound helped liquidate more than $307 million in leveraged bearish bets on crypto derivatives in the past 24 hours, according to CoinGlass data. Notably, Bitcoin’s perpetual funding rates remain below neutral even amid the rally, suggesting that this move is not driven by aggressive leveraged speculation.
Crypto Stocks Gain
Crypto-related stocks also joined the advance. Stablecoin issuer Circle (CRCL) jumped 20% after record profit, while Coinbase (COIN), treasury company Bitcoin Strategy (MSTR) and Galaxy (GLXY) gained 5-6%. Bitcoin miners – increasingly tied to AI infrastructure themes – extended their rebound, with Bitfarms (BITF), Bitdeer (BTDR) and MARA Holdings (MARA) leading the gains.
Many cryptocurrency-related stocks have attracted significant short interest from hedge funds, noted Markus Thielen of 10x Research, leaving them ripe for a sharp reversal.
Improving risk appetite in traditional markets has created a favorable backdrop for crypto to rebound. The tech-heavy S&P 500 and Nasdaq 100 were up 0.6% and 1.1%, respectively, in early trading. The software sector, plagued by AI fears, extended its gains, with the iShares Expanded Tech-Software Sector ETF (IGV) up 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 U.S. exchange, and the broader global market average. It is widely considered an indicator of U.S. capital flows, institutional participation and general market sentiment.
While the MSTR/IBIT ratio is up 12% year to date, indicating that the strategy has outperformed the BlackRock ETF. This relative strength indicates continued risk appetite, even though bitcoin has fallen 25% this year.
Additionally, U.S. spot Bitcoin ETFs saw $257.7 million in inflows on Tuesday, the largest daily total since February 6.
