Author: CryptoSlate
Compiled by: Deep Tide TechFlow
Original title: Bitcoin Returns to $70K, Rebound or Real Trap?
Deep Tide Insights:
After a violent rebound from $60,000 to $70,000 within 24 hours, Bitcoin appears to have recovered its losses. However, underlying logic reveals that this was not driven by firm spot buying but rather by a forced repositioning and short squeeze triggered by a recovery in the macro market. This article delves into the causes of the "hair-raising turmoil" in early February 2026: from liquidity contraction expectations following Trump's appointment of Kevin Warsh to the pressure on miners' profits hitting a historical low. Although the price has returned above $70,000, options traders are heavily betting on a potential second dip to $50,000–$60,000 by the end of February, revealing the still fragile sentiment and complex financial博弈 beneath the surface of the "violent rebound."
Bitcoin surged from $60,000 to above $70,000 in less than 24 hours, erasing the brutal 14% decline that had tested all "buy-the-dip" theories in the market.
The speed of this reversal—a 12% single-day rebound and a 17% recovery from the intraday low—was so intense that it felt like the dust had cleared after a liquidation. However, the mechanism behind the rebound tells another story: it was more a combination of cross-asset stabilization and forced position rebalancing rather than conviction-driven large-scale spot demand.
Meanwhile, the derivatives market remains crowded with bearish protection positions, with pricing suggesting that $70,000 may be just a waystation rather than a true bottom.
Liquidation Wave Meets Macro Pressure
On February 5, the market opened near $73,100, briefly rallied, then collapsed, closing at $62,600. According to CoinGlass data, the single-day decline led to the liquidation of approximately $1 billion in leveraged Bitcoin positions.
This figure alone illustrates the chain reaction of forced selling, but the broader context was even worse.
CoinGlass data shows that Bitcoin futures open interest had already dropped from about $61 billion to $49 billion last week, meaning the market had begun deleveraging before the final wave of冲击 hit.
The trigger was not internal to cryptocurrency. Media reports characterized the sell-off as a deterioration in risk sentiment, primarily driven by a tech stock sell-off and volatility in precious metals—silver once plunged 18% to around $72.21, dragging down all related risk assets.
Deribit's research confirmed this spillover effect, noting that derivatives sentiment had turned extremely bearish: negative funding rates, an inverted implied volatility term structure, and the 25-delta risk-reversal skew depressed to around -13%.
This is a classic state of "extreme fear," where positioning amplifies price swings in both directions.
Policy narratives added fuel to the fire. According to Reuters, the market reacted violently to elected President Donald Trump's choice of Kevin Warsh as Fed chair, with traders interpreting it as a signal of future balance sheet contraction and liquidity tightening.
Meanwhile, miners faced significant profit pressure. According to TheMinerMag, the hash price fell below $32 per PH/s, and network difficulty was expected to drop by about 13.37% in two days. However, this relief mechanism had not yet taken effect before prices broke below support levels.
Bitcoin's price action over 48 hours, showing the crash from $73,000, the break below $63,000 triggering stop-losses, local bottoming near $60,000, and the subsequent rebound to above $70,000.
Macro Reversal and Squeeze Mechanism
On February 6, the market opened at the previous day's close, then fell to an intraday low near $60,000 before skyrocketing to a high of $71,422. After three failed attempts to break above this level, the price retreated below $70,000.
The catalyst did not originate from within the crypto industry but from a sharp turnaround in cross-asset movements. Wall Street performed strongly: the S&P 500 rose 1.97%, the Nasdaq gained 2.18%, the Dow Jones increased by 2.47%, and the Philadelphia Semiconductor Index (SOX) surged 5.7%.
Metal prices rebounded猛烈ly, with gold up 3.9% and silver up 8.6%, while the U.S. dollar index fell 0.2%, signaling a loosening of financial conditions.
Bitcoin moved mechanically with this shift. The correlation was evident: as tech stocks stabilized and metals rebounded, Bitcoin was pulled up through common risk exposures.
However, the violence of this rebound also reflected derivatives positioning. A skew near -13%, negative funding rates, and an inverted volatility structure created conditions where any macro-positive catalyst could trigger short-covering and forced repositioning.
This rebound was essentially driven by a liquidity event and amplified by the unwinding of crowded short positions.
Nonetheless, forward-looking signals remain bearish. Data from Deribit shows that for options expiring on February 27, put open interest is heavily concentrated at strike prices between $60,000 and $50,000.
Deribit's Sean Dawson told Reuters that demand for downside protection was "extreme." This is not hindsight analysis but rather traders explicitly hedging against the next drop, even after the rebound.
Bitcoin deleveraging chart, showing the surge in liquidations, open interest reset from $62 billion to $49 billion, negative funding rates, and skew hitting -13%.
Can $70K Hold? Analytical Framework
The logic for holding $70,000 is based on three conditions.
First, the macro rebound needs to be sustained, with tech stocks continuing to stabilize and U.S. Treasury yields and the dollar not tightening again. This rebound was clearly a cross-asset联动; if U.S. stocks turn lower again, Bitcoin will not be immune.
Second, leverage needs to continue cooling off with no new forced selling. Open interest has already dropped significantly, reducing the risk of a "vacuum drop."
Third, miner pressure needs to be substantially alleviated when the difficulty adjustment takes effect. If prices can hold steady within the adjustment window, the expected 13.37% difficulty reduction will reduce marginal selling pressure and allow the hash rate to stabilize.
Arguments supporting another washout also have three reasons:
First, options positioning remains bearish. The largest put concentrations for late February are at $60,000–$50,000, a forward-looking signal embedded in the market's implied probabilities, not lagging sentiment.
Second, derivatives signals remain fragile. Extreme skew, recently frequent negative funding rates, and an inverted volatility structure are more consistent with a "relief rally" within a fear regime than a trend reversal.
Third, ETF flow data shows持续outflows. As of February 5, monthly net outflows for Bitcoin ETFs had reached $690 million. Although data for February 6 is not yet available, existing patterns suggest institutional allocators have not shifted from "de-risking" to "re-engagement."
Signal Dashboard
The True Significance of $70K
This price level itself holds no magic. Its importance lies in its position above the on-chain absorption cluster of $66,900 to $70,600 identified by Glassnode.
Holding $70,000 means this cluster has absorbed enough supply to temporarily stabilize prices. However, holding firm requires not only technical support but also the return of spot demand, the unwinding of derivatives hedge positions, and the stabilization of institutional flows.
The rebound from $60,000 was real, but its composition is crucial. If macro conditions change, cross-asset stability will reverse.
Forced position unwinding created a mechanical rebound, which does not necessarily translate into a sustained trend. Options traders are still pricing in a significant probability of a drop toward $50,000–$60,000 within the next three weeks.
Bitcoin has reclaimed $70,000 but is currently consolidating below it. This suggests a pause before the next test, and the outcome of that test depends on three conditions occurring sequentially: maintained macro risk appetite, a slowdown or reversal in ETF outflows, and normalized derivatives sentiment.
The market delivered a violent snapback, but the forward curve and flow data indicate that traders are not yet betting on its persistence. $70,000 is not the endgame; it is merely the baseline that will determine the winner of the next phase of the debate.
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