The cryptocurrency market exhibited signs of recovery on Thursday, with Bitcoin (BTC) rising to $67,801.44, marking a 3.9% increase from a local low of $65,600. The upward momentum continued overnight, resulting in a 2% gain since midnight UTC for Bitcoin. Solana (SOL) experienced a notable 2.7% increase, while Ether (ETH) registered a more modest rise of 1.2%. However, the overall trend remains bearish as Bitcoin has been producing a series of lower lows and lower highs, cancelling out the gains observed over the 12 months leading to October 2025.
In the short term, analysts believe Bitcoin must surpass the $72,000 mark to signal a definitive shift towards a bullish trend, moving away from the current range-bound price action characterized by fluctuating support and resistance levels. Concurrently, the situation for spot Bitcoin exchange-traded funds (ETFs) in the U.S. appears concerning, with the funds witnessing their largest drawdown in this cycle—over 100,300 BTC withdrawn since October, translating to around $6.8 billion worth of additional selling pressure on an already vulnerable market.
Market dynamics related to derivatives are beginning to stabilize, as indicated by a rise in open interest to $15.8 billion, suggesting a transition from deleveraging efforts to establishing a firmer market floor. Additionally, retail sentiment has been on the uptick, with funding rates shifting from negative to neutral and even positive across various trading venues, reaching levels as high as 10% on platforms like Bybit and Hyperliquid. Institutional enthusiasm appears to remain steady, with a three-month annualized basis maintaining at 3%.
The Bitcoin options market reflects a subtle change in sentiment with recent 24-hour trading volumes showing a split of 51% in favor of call options. Despite this, the one-week 25-delta skew surged to 17%, while the implied volatility (IV) term structure exhibits short-term backwardation. This indicates that traders continue to pay a “panic premium” for short-term protections even as longer-dated options stabilize around 49%.
According to Coinglass, the past 24 hours saw a total of $179 million in liquidations, split between longs (56%) and shorts (44%), with Bitcoin leading at $59 million, followed by Ether at $46 million and other cryptocurrencies at $16 million. Traders are monitoring the Binance liquidation heatmap, identifying $68,400 as a critical liquidation level to watch in the event of a price rally.
In altcoin movements, several tokens showed strong performance overnight, with MORPHO rallying over 12% since midnight UTC and AI payment token KITE increasing by 11%, extending a remarkable 30-day gain of 153%. The decentralized finance (DeFi) sector also witnessed action, as tokens like Jupiter (JUP) rose more than 3.6% following a brief dip to a seven-day low.
The CoinDesk Smart Contract Platform Select Index (SCPXC) emerged as the standout performer, gaining 2.25%, followed closely by CoinDesk’s Memecoin Index (CDMEME), which rose by 2.2%. The Bitcoin-centric CoinDesk 20 (CD20) demonstrated a more reserved gain of 1%, correlating with the more tempered movement among major cryptocurrencies.
During consolidation phases, altcoins often thrive, providing traders the opportunity to reallocate capital into riskier bets without the fear of missing out on potential upward movements in major coins like Bitcoin, Ether, and XRP.
