Bitcoin’s recent move toward the $70,000 level appears to be driven more by positioning dynamics than renewed bullish conviction, according to market maker Enflux. The firm said the rebound largely reflects traders covering short positions after leaning bearish during the latest geopolitical flare-up.
The cryptocurrency was trading around $68,000 during midday trading in Hong Kong, recovering from a sharp weekend drop that briefly pushed prices near $63,000. According to Enflux, the bounce began after markets realized the tensions linked to Iran had not immediately escalated into a broader regional conflict affecting major Gulf trade routes, including those connected to Dubai.
“The market is not pricing catastrophe, but it is not pricing resolution either,” the firm said, noting that traders had built significant short exposure during the weekend headlines before covering those bets as fears of rapid escalation faded.
Enflux added that crypto markets tend to react more quickly than traditional assets during geopolitical shocks because they trade continuously and provide an immediate outlet for risk adjustments.
Institutional demand has also helped support prices. Over the past five trading sessions, spot bitcoin exchange-traded funds have drawn about $1.45 billion in net inflows, providing a steady source of buying interest despite broader uncertainty.
On-chain data from analytics firm Glassnode suggests conditions are stabilizing, though conviction remains limited. Momentum indicators are beginning to recover, with bitcoin’s relative strength index climbing to around 41 from roughly 36 a week earlier. However, the metric remains below the neutral 50 level typically associated with stronger bullish momentum.
Spot market activity has strengthened as well. Trading volumes have risen to about $9.6 billion from $6.6 billion the previous week, while buying and selling pressure has become more balanced, indicating that the earlier wave of aggressive selling is starting to fade.
Derivatives markets, however, remain cautious. Glassnode noted that the cost of holding leveraged long positions has dropped sharply, while futures trading still shows sellers outnumbering buyers, signaling continued hesitation among leveraged traders.
Prediction markets are reflecting similar uncertainty. On Polymarket, the probability of bitcoin dropping to $65,000 during March has declined by 11 percentage points to 73%, while the odds of a move to $60,000 have fallen 10 points to 41%. A separate contract tracking whether bitcoin reaches $60,000 before $80,000 has also slipped, dropping 12 points to 61%.
Taken together, the data suggests bitcoin has found some short-term support following its recent sell-off, but traders remain reluctant to price in either a decisive rally or a deeper decline as geopolitical risks and broader macro uncertainty continue to cloud the outlook.
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