Bitcoin Rebounds Toward $70,000, But Is It A Momentary Relief Or Slow Bull Run Signal?

What Happened

Another key indicator comes from CryptoQuant’s short-term holder profit and loss data, which tracks whether newer investors are selling at gains or losses.

This pattern is known as capitulation, where weaker investors exit the market. Capitulation is common near market bottoms, because stronger buyers absorb those losses.

Until short-term holders begin selling at profits again, analysts warn that rallies can become “exit liquidity,” where trapped investors sell into strength rather than holding.

Market Context

Bitcoin surged sharply this week, briefly nearing $70,000 before pulling back. The move sparked debate across the market: has Bitcoin finally bottomed, or is this just another relief rally inside a broader bear phase?

Options Market Shows Fragile Conditions, Not Strong Support

In simple terms, gamma measures how options market makers hedge risk. When Bitcoin sits in a negative gamma zone, dealer hedging tends to amplify price moves.

The heatmap also shows fewer strong resistance “gamma walls” above current prices. This creates less friction for upward moves, which helps explain Bitcoin’s sudden surge.

However, it also means the market lacks structural stability.

Without strong hedging support, price moves remain fragile and prone to reversal.

However, one positive shift does not confirm a full reversal. During past bear markets, temporary demand increases often occurred before further consolidation.

Why It Matters

Multiple on-chain, derivatives, and institutional indicators show early signs of stabilization. However, key signals still point to a fragile recovery rather than a confirmed bullish reversal.

This is an important early signal. When demand exceeds supply, it suggests buyers are stepping in and absorbing coins from sellers.

However, the signal has not fully reversed.

Technical and Historical Data Suggest Selling Pressure Is Easing

Bitcoin’s relative strength index (RSI), a momentum indicator, recently recovered after reaching extremely oversold levels in early February. This suggests selling pressure has weakened.

Details

Bitcoin’s options positioning recently shifted into what traders call a negative gamma regime, according to Glassnode’s GEX heatmap.

That means rallies can accelerate quickly—but so can selloffs.

Bitcoin Spot Demand Is Improving for the First Time in Months

CryptoQuant data shows Bitcoin’s apparent demand, which measures net accumulation versus new supply, has turned positive for the first time since November.

A sustained trend of rising demand over several weeks would provide stronger confirmation.

Short-Term Holders Are Still Selling at Losses

The data shows short-term holders have been selling at losses consistently since late January. Several major loss spikes occurred in early February and again recently.

Historically, such RSI recoveries often lead to short-term rebounds.

Quarterly performance data also shows Bitcoin rarely experiences multiple consecutive quarters of heavy losses.