Bitcoin extended its rebound on Wednesday, climbing back above $68,500 during U.S. hours and notching a gain of more than 6% over the past 24 hours as crowded bearish trades across the crypto market began to unwind.
The advance triggered a sharp recovery in altcoins. Ether (ETH) jumped 10%, retaking the $2,000 level for the first time in a week. Solana (SOL), dogecoin (DOGE), cardano (ADA) and chainlink (LINK) each surged by double digits, outperforming bitcoin as well as the broader CoinDesk 20 Index.
With the latest upswing, BTC has erased the early-week slide that briefly sent prices below $63,000. The turnaround comes after an extended period of deeply negative sentiment. The Crypto Fear & Greed Index has remained in “Extreme Fear” territory for much of February, reflecting persistent caution among market participants.
Derivatives data had also highlighted the skewed positioning. Perpetual futures funding rates — payments exchanged between long and short traders — repeatedly dipped below zero in recent weeks. That meant short sellers were paying longs to maintain their positions, a sign that bearish bets had grown crowded. Such setups often leave markets susceptible to powerful short squeezes once prices begin rising.
In the past 24 hours alone, nearly $400 million in leveraged short positions have been liquidated across crypto derivatives markets, according to CoinGlass. Even so, bitcoin’s perpetual funding rates remain slightly negative, suggesting the rally has not yet been driven by aggressive leveraged buying.
Crypto equities rally
Crypto-linked stocks participated in the rebound. Stablecoin issuer Circle (CRCL) soared 29% after posting stronger-than-expected earnings results. Coinbase (COIN) climbed 13%, while bitcoin treasury firm Strategy (MSTR) and digital asset investment manager Galaxy (GLXY) advanced between 7% and 8%.
Bitcoin mining shares, which have increasingly traded alongside AI infrastructure themes, lagged slightly. Bitfarms (BITF) and MARA Holdings (bitcoin mining company) gained around 6%–7%, trailing the broader crypto equity complex.
Markus Thielen of 10x Research noted that many crypto-related stocks had built up heavy short interest from hedge funds in recent weeks, positioning them for a sharp reversal as sentiment shifted.
Support from broader markets
A firmer tone in traditional markets also provided a supportive backdrop. The S&P 500 rose 0.7% in early trading, while the Nasdaq 100 gained 1.2%. The technology software segment continued its rebound, with the iShares Expanded Tech-Software Sector ETF (IGV) advancing another 2% during the session.
There are early indications that U.S.-based buyers may be returning to crypto markets. The Coinbase Premium Index — which tracks the price difference between bitcoin on Coinbase and global exchanges — has turned positive for the first time in more than 40 days. The metric is commonly viewed as a gauge of U.S. institutional demand and capital flows.
At the same time, the performance ratio between Strategy (MSTR) and BlackRock’s spot bitcoin ETF (IBIT) is up 12% year to date, suggesting equity investors continue to favor higher-beta exposure even though bitcoin remains down roughly 25% this year.
Adding to the constructive tone, U.S. spot bitcoin ETFs recorded $257.7 million in net inflows on Tuesday, marking their largest daily intake since Feb. 6.
