Bitcoin held the $65,000 support and climbed to a local high of $70,578 before easing slightly. At press time, BTC traded near $69,951, up 4.31% over the past 24 hours.
The rebound also pushed Bitcoin above its Exponential Moving Average (EMA9) near $68,428, signaling short-term bullish momentum.
Even so, analysts pointed to a deeper structural shift in derivatives positioning. CryptoQuant analyst Darkfost noted that leverage across Bitcoin markets had dropped sharply, suggesting a broader market reset.
Bitcoin faces a leverage reset amid prolonged weakness
Global macro uncertainty and recent volatility forced traders to scale back leverage. That shift appeared clearly in Bitcoin’s [BTC] Estimated Leverage Ratio (ELR) on Binance.
According to Darkfost, the ELR declined from 0.198 to 0.152 since February. Such sharp drops typically emerge after strong volatility phases.
Historically, falling leverage ratios reflect traders closing positions or forced liquidations. That process reduces speculative exposure and flushes excess leverage from the system.
That move aligned with broader derivatives activity.
Data from Checkonchain showed that Bitcoin Futures Open Interest 7-day Change turned negative, dropping from roughly 4.2 to around -0.6.
Declining Open Interest typically indicates that traders closed positions rather than opening new ones. In many cycles, such deleveraging phases stabilize markets before larger directional moves.
Is short-covering momentum sustainable?
However, recent upside momentum appeared closely linked to short liquidations rather than fresh capital inflows.
When BTC rebounded from its $65,000 dip, more than $115 million in short positions were liquidated between the 9th and the 10th of March.
That shift triggered forced buying as traders closed bearish positions.
On top of that, the Taker Buy/Sell Ratio climbed above 1 for two consecutive days, signaling stronger aggressive buying in derivatives markets.
A ratio above one usually reflects dominant buy-side pressure from market takers.
That demand coincided with improving momentum indicators.
Bitcoin’s Relative Strength Index (RSI) climbed from 42 to roughly 51, indicating strengthening short-term momentum.
The move also pushed BTC above its EMA9 support level, reinforcing near-term bullish sentiment.
Even so, the rally’s durability remained uncertain.
If BTC sustained momentum above the EMA9 near $68,400, the next resistance could appear near $74,050.
Failure to hold that level could expose Bitcoin to another retracement toward the $65,000 support zone.
Final Summary
- Bitcoin [BTC] rebounded from the $65,000 support, briefly reaching $70,578 before stabilizing near $69,951.
- However, the rally appears partly driven by short covering rather than fresh bullish positioning, raising the risk of another pullback.
