After a week of harsh sales pressure, the cryptocurrency market turned upwards as of February 25, making a breathtaking comeback. Bitcoin’s 6% gain in value, reaching its historical peak of $69,000 in 2021, triggered a massive liquidation wave in the market. This activity, in which a total of 571 million dollars of positions were deleted, renewed morale among investors by increasing the Fear and Greed Index to 18 points.
Liquidity Storm and ETF Doping
The main motivation behind this sudden rise in the market was recorded as a technical squeeze rather than news of a new regulation or macroeconomic development. More than 132 thousand “bear” investors, who bet that prices would fall, had to close their short positions with the sudden rise. While these short positions accounted for more than 85% of the $571 million loss, Bitcoin alone led with a liquidation volume of $231 million and Ethereum with a liquidation volume of $202 million.
Strong institutional demand from the Spot Bitcoin ETF wing continues to fuel the rise. The $506.6 million in net cash flow entering the ETFs on February 25 brought the total inflow to $54.57 billion. This steady inflow of institutional money stabilized the market by balancing panic selling by retail investors.
This optimistic mood was not limited to the leading crypto asset; Altcoin projects such as Ethereum, Solana and XRP achieved value increases ranging from 6% to 12%. A similar rally was observed in crypto-focused stocks; Coinbase closed the day with a 14% premium, MicroStrategy 9% and Circle 34%. In particular, Circle’s strong balance sheet reinforced confidence in the cryptocurrency ecosystem.
Critical Resistance Lines and Analyst Warnings
Despite the excitement created by the rise, experts agree that it is too early to say that the market has completely entered the “bull” phase. Famous analyst Joel Kruger warns market participants that the current situation may still be a bear market correction. In order for Bitcoin to start a permanent uptrend, it must first overcome the tough resistance zone between $70,000 – $72,000.
Looking at historical data, Bitcoin has been rejected from this area three times, falling below $65,000 each time. Another critical threshold is pointed out as the $ 78,000 level determined according to on-chain data flows. While this figure is considered a benchmark that reflects the fair value of the asset, closes above this level will be considered evidence of a real change in momentum.
In the current chart, the market is at a decision stage. If the $72,000 threshold is not exceeded, the price is expected to remain horizontal for a while or enter a consolidation process. It is vital for investors to maintain their liquidity balance and be prepared for sudden increases in volatility during this uncertain period.
