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Bitcoin rises to $67,500, with Circle driving an increase in cryptocurrency stocks as recovery gains momentum.
Ether, Solana, and Dogecoin are some of the altcoins achieving increases of 10% or more.
Bitcoin (BTC) price on Wednesday (CoinDesk)
What to know:
- Bitcoin experienced a rebound of over 5% to approximately $67,500, initiating a widespread crypto relief rally. Notable altcoins such as ETH, SOL, DOGE, ADA, and LINK increased by around 10%.
- This surge came after several weeks of intense bearish sentiment and heavily crowded short positions, resulting in more than $307 million in leveraged bearish trades being liquidated in the last 24 hours.
- Stocks associated with crypto also surged alongside digital currencies, as a favorable Coinbase Premium Index and the highest U.S. spot bitcoin ETF inflows since early February indicated a cautious return of U.S. investors and risk tolerance.
Bitcoin climbed back to $67,500 during the U.S. morning session on Wednesday, marking a gain of over 5% within the last 24 hours as deeply bearish positioning in the crypto sector began to reverse.
This movement triggered a broader relief rally among altcoins. Ethereum’s ether (ETH) surged by 10%, surpassing the $2,000 mark for the first time in a week. Solana (SOL), , and Chainlink each recorded increases exceeding 10%, surpassing bitcoin and the overall gains of the CoinDesk 20 Index.
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Wednesday’s surge follows a phase of significantly negative sentiment within the market. The Crypto Fear & Greed Index, a widely used sentiment indicator, has remained in Extreme Fear levels for the majority of February.
Crypto Fear & Greed Index at historic lows (Alternative.me)
Perpetual futures funding rates — the regular payments exchanged between long and short traders — have also turned negative several times in recent weeks. This indicates that short sellers have been compensating long traders to sustain positions, suggesting that bearish positions had become overcrowded. Such conditions often render markets susceptible to abrupt upward movements when prices begin to rise.
The recent rebound has liquidated over $307 million in leveraged bearish positions across crypto derivatives in the last 24 hours, according to CoinGlass data. Remarkably, bitcoin perpetual funding rates continue to remain below neutral even during the rally, implying that the movement is not being fueled by aggressive leveraged trading.
