Bitcoin has rebounded 12% from its recent low, trading near $71,000. This recovery coincides with a sharp 70% improvement in the Coinbase Premium index, indicating renewed buying interest from U.S. investors. However, analysts caution the rally may be a short-term “dead cat bounce” driven by bearish traders covering their positions rather than fresh demand, with the market’s long-term direction still tied to broader macroeconomic factors.
Bitcoin is trading at $70,998, marking a 12% recovery from Friday’s low of $62,822 according to CoinGecko. The bounce coincided with a significant jump in the Coinbase Premium index, a metric tracked by CoinGlass, which rose over 70% to suggest improved U.S. investor appetite.
Analysts describe the move as technically driven rather than a sign of sustained bullish conviction. “This rally is mostly short covering and a short squeeze after the capitulation flush,” Bitrue research lead Andri Fauzan Adziima stated.
Data from Velo shows declining open interest alongside a positive cumulative volume delta, indicating traders are closing short positions. Ryan Yoon, senior analyst at Tiger Research, noted the extreme low Fear & Greed Index of 5 suggests this is a powerful short-covering rally.
Regional pressures eased after Japan’s election spurred a rally in Asian equities. The market’s long-term trajectory, however, remains dependent on U.S. economic data and macroeconomic trends.
Experts believe recent deleveraging has cleared overhanging risks from the market. “We think that the crash has simply led traders to deleverage their positions, which is why you see open interest falling,” BTSE COO Jeff Mei explained.
