 ▲ Bitcoin in the United States © |
Bitcoin (BTC) surged nearly 4% on news of easing U.S. consumer price index (CPI) inflation, but it now stands at a crossroads near the $70,000 resistance level—whether the move will end as another short squeeze or develop into a full-fledged breakout.
According to crypto-focused outlet AMB Crypto on February 14 (local time), the U.S. Bureau of Labor Statistics reported that January’s CPI rose 2.4% year-over-year, below market expectations of 2.5%. As signs of cooling inflation emerged, the market reacted immediately, with Bitcoin climbing 3.93% in a single day, marking its strongest intraday rebound in two weeks.
During the rally, approximately $267 million worth of positions were liquidated, about 85% of which were short positions. Analysts suggest that the sharp rise following the CPI announcement was driven more by a short squeeze—buying triggered by the liquidation or covering of short positions—than by fresh buying demand. However, Bitcoin continues to defend its lower range, fluctuating above the recent low of around $59,000 recorded earlier this month.
On-chain data continues to send mixed signals. According to CryptoQuant, Bitcoin’s funding rates remain in negative territory, indicating a persistent short bias across the market. Additionally, roughly $150 million in sell pressure is concentrated between the $70,000 and $75,000 range, making it a key short-term resistance zone. Failure to clearly break above this range could limit the extent of the rebound.
Demand in the spot market also remains subdued. Although spot Bitcoin ETFs recently recorded about $15 million in net inflows after two consecutive days of net outflows, analysts say the scale is insufficient to suggest a sustained trend reversal. U.S. investors appear to be waiting on the sidelines with the possibility of further corrections in mind rather than initiating aggressive buying.
Ultimately, whether this rebound signals a trend reversal or proves to be merely a temporary short squeeze depends on a decisive break above the $70,000 level. Technically, Bitcoin has posted a 4% gain, but without substantial spot buying support, momentum could weaken again.
*Disclaimer: This article is for investment reference only and we are not responsible for any investment losses arising from it. The content should be interpreted for informational purposes only.*