Bitcoin Bitcoin prices rebounded to $67,500 during early U.S. trading on Wednesday, up more than 5% in the past 24 hours, as deep bearish positions across the cryptocurrency market began to unwind.
The move triggered a broader relief rally in altcoins. Ethereum (ETH) surged 10%, regaining $2,000 levels for the first time in a week. Solana (SOL), , and linkk Both rose more than 10%, outperforming gains in Bitcoin and the broader market benchmark CoinDesk 20 index.
Wednesday’s rally comes after a period of extremely negative sentiment across the market. The popular sentiment gauge, the Cryptocurrency Fear & Greed Index, has been hovering at extreme fear levels for much of February.
Perpetual futures funding rates (regular payments between long and short traders) have also turned negative multiple times over the past few weeks. This means short sellers have been paying longs to maintain their positions, suggesting bearish bets have become crowded. This setup tends to leave the market vulnerable to a sharp squeeze when prices start to rise.
The rally has liquidated more than $307 million in leveraged bearish bets on cryptocurrency derivatives in the past 24 hours, CoinGlass data shows. Notably, even during the rally, Bitcoin perpetual funding rates remained below neutral, suggesting that the move was not driven by aggressive leveraged speculation.
Cryptocurrency stocks rise
Cryptocurrency-related stocks also joined the rally. Stablecoin issuer Circle (CRCL) rose 20% after earnings beat expectations, while Coinbase (COIN), Bitcoin funding firm Strategy (MSTR) and Galaxy (GLXY) rose 5%-6%. Bitcoin miners – increasingly tied to artificial intelligence infrastructure themes – extended the rally, with Bitfarms (BITF), Bitdeer (BTDR) and MARA Holdings (MARA) leading the way.
Markus Thielen of 10x Research noted that many cryptocurrency-related stocks have accumulated significant short interest from hedge funds, setting them up for a sharp reversal.
Improved risk appetite in traditional markets provides a favorable backdrop for the cryptocurrency rally. The S&P 500 and the tech-heavy Nasdaq 100 were up 0.6% and 1.1%, respectively, in early trading. The software sector, beset by concerns about artificial intelligence, extended gains, with the iShares Expanded Tech-Software Sector ETF (IGV) adding another 2% during the session.
Early signs of U.S. buyers returning
The Coinbase Premium Index turned positive again for the first time in more than 40 days. The index tracks the difference between Bitcoin on major U.S. exchange Coinbase and the broader global market average price. It is widely seen as a gauge of U.S. capital flows, institutional participation and overall market sentiment.
And so far this year, the MSTR to IBIT ratio is up 12%, indicating that Strategy is outperforming BlackRock’s ETFs. This relative strength suggests continued risk appetite, even though Bitcoin is down 25% this year.
Additionally, the U.S. Spot Bitcoin ETF recorded $257.7 million in inflows on Tuesday, its largest single-day inflow since February 6.