Bitcoin rose back toward the $70,000 level after U.S. inflation data came in cooler than expected, helping risk assets recover following a steep crypto drawdown. The move comes after a large bout of liquidation and market-cap losses, yet sentiment remains fragile: the widely watched Crypto Fear & Greed Index is still in ‘extreme fear’ territory.

Why it matters

- Macro data continues to steer crypto’s near-term direction, particularly as traders price the path of interest rates and liquidity conditions.

- A rebound on improving headlines doesn’t automatically reset positioning; high fear readings can persist even during relief rallies, reflecting demand for hedges and reduced leverage.

Signals to monitor

- Funding rates and open interest: whether the bounce is driven by new risk-taking or short covering.

- Spot versus derivatives flows: sustained spot demand tends to make rallies more durable.

- Key levels: whether BTC can hold above psychological thresholds (e.g., $70K) and reclaim higher resistance zones.

Bigger picture

The episode underscores how quickly crypto markets can deleverage and how sentiment can lag price—especially after abrupt volatility. Traders will likely stay focused on upcoming macro prints and liquidity conditions.