Bitcoin is regaining strength after retreating above the $70,000 level, a move that helped restore the bullish sentiment following weeks of high volatility. The recovery comes after a turbulent period in global markets, where global developments and high uncertainty have caused price volatility for all risk assets.
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According to the latest report from CryptoQuant of XWIN Research Japan, Bitcoin experienced significant volatility between the end of January and the beginning of March 2026. During this period, the asset briefly fell within the $60,000 range before making a sharp rebound in early March that lifted prices back to the $73,000 area.
The report notes that the initial decline was largely due to the development of the country. On February 28, reports of a US-Israeli military strike on Iran fueled tensions across the Middle East, injecting great uncertainty into global markets. As risk sentiment deteriorated, Bitcoin quickly fell to around $63,000 on February 29.
However, the sale proved short-lived. Market conditions stabilized within days, and by March 2 Bitcoin had already stabilized to around the $70,000 level.
Momentum accelerated soon after, as renewed buying pressure between March 4 and March 5 pushed BTC above $73,000, indicating a potential shift in short-term sentiment as investors reassess the broader market environment.
ETF Entry and Short Covering Fuel Bitcoin’s Rebound
The CryptoQuant report goes on to explain that renewed inflows into US spot Bitcoin ETFs played a major role in driving the recent rebound. At the beginning of March, several hundred million dollars went into these investment vehicles, providing direct support to identify market demand. On March 4 alone, ETF inflows exceeded $200 million, highlighting the resurgence of institutional participation after a period of weak activity.
Derivatives markets contributed significantly to this rally. Open interest rose sharply while funding levels shifted into negative territory, indicating that many traders were positioned strongly on the short side. As the price of Bitcoin began to rise, these crowded short positions were forced to unwind, causing waves of short closures that increased the upward momentum with short covering.
On-chain indicators provide a more nuanced picture. The report notes that some bearish signs are still present, including the 90-day Realized Profit / Loss Ratio that remains below 1.0 and the growing share of coins currently held in unrealized losses. At the same time, positive developments are emerging from below.
One example is the Coinbase Premium Index, which recently returned to positive territory after a long period of negative readings. This change suggests that demand from US-based investors is beginning to stabilize.
The move toward $73,000 appears to be primarily driven by a combination of ETF inflows and a short rally in derivatives.
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Bitcoin Breaks Above Key Resistance As Momentum Strengthens
The chart shows Bitcoin trading near $73,100 after a strong rally pushed the price confidently above the $70,000 level. This breakout follows several weeks of consolidation between $64,000 and $69,000, where the market repeatedly tested both support and resistance without establishing a clear direction.
From a technical point of view, the recent rally has allowed Bitcoin to recover its short-term moving averages, including the 50-period and 100-period lines, which previously served as resistance during the consolidation phase. The ability to break above these levels suggests a short-term momentum shift as buyers regain control of the market.
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The price is now approaching the 200-period moving average, which sits slightly above the current level and represents an important technical barrier near the $74,000 region. This level may serve as the next resistance point, as long-term participants often use it as a reference for trend confirmation.
Volume also increased during the exit, indicating strong participation as the market moves higher. Sharp upside candles indicate aggressive buying pressure, consistent with the short-cover volatility seen in the derivatives markets.
If Bitcoin manages to rally above $70,000, the breakout could establish this level as a new support area. However, failure to maintain this structure could lead to a retest of the $68,000–$69,000 region before the market attempts a new move.
Featured image from ChatGPT, chart from TradingView.com
