Bitcoin rallied strongly during Wednesday’s U.S. trading session, reclaiming the $68,500 level and posting a gain of more than 6% over the past 24 hours as crowded bearish bets across the crypto market began to unwind.
The recovery triggered a sharp upswing in altcoins. Ether (ETH) surged 10%, climbing back above $2,000 for the first time in a week. Solana (SOL), dogecoin (DOGE), cardano (ADA) and chainlink (LINK) each delivered double-digit gains, outpacing bitcoin and the broader CoinDesk 20 Index.
With the latest advance, BTC has fully erased the early-week selloff that briefly pushed prices below $63,000. The reversal comes after weeks of deeply negative sentiment. The Crypto Fear & Greed Index remained entrenched in “Extreme Fear” territory for much of February, reflecting widespread caution among traders.
Derivatives markets had mirrored that bearish tone. Perpetual futures funding rates — periodic payments exchanged between long and short traders — turned negative several times in recent weeks, signaling that short sellers were paying longs to hold positions. Such crowded downside trades often leave markets vulnerable to sharp short squeezes when prices begin to rise.
In the past 24 hours, nearly $400 million in leveraged short positions have been liquidated across crypto derivatives venues, according to CoinGlass data. Even so, bitcoin’s perpetual funding rates remain slightly below neutral, suggesting the rally has not yet been driven by aggressive leveraged buying.
Crypto equities join the move
Crypto-related stocks also advanced. Stablecoin issuer Circle (CRCL) jumped 29% after reporting better-than-expected earnings results. Coinbase (COIN) climbed 13%, while bitcoin treasury firm Strategy (MSTR) and digital asset investment manager Galaxy (GLXY) gained between 7% and 8%.
Bitcoin miners, which have increasingly traded alongside AI infrastructure narratives, lagged slightly. Bitfarms (BITF) and MARA Holdings (MARA) rose around 6%–7%.
Markus Thielen of 10x Research noted that many crypto-linked equities had built up substantial short interest from hedge funds in recent weeks, setting the stage for a rapid reversal as sentiment shifted.
Support from traditional markets
A firmer tone in equities provided a supportive backdrop. The S&P 500 gained 0.7% in early trading, while the Nasdaq 100 advanced 1.2%. The software segment, previously pressured by concerns surrounding artificial intelligence spending, extended its rebound, with the iShares Expanded Tech-Software Sector ETF (IGV) adding another 2%.
There are also early indications that U.S. buyers are returning to the crypto market. 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, a development often interpreted as a sign of renewed U.S. institutional demand.
Meanwhile, the year-to-date performance ratio between Strategy (MSTR) and BlackRock’s spot bitcoin ETF (IBIT) is up 12%, signaling continued appetite for higher-beta exposure even as bitcoin remains down roughly 25% this year.
Further reinforcing the rebound narrative, U.S. spot bitcoin ETFs recorded $257.7 million in net inflows on Tuesday — the largest daily total since Feb. 6.
