Bitcoin and other major cryptocurrencies are showing signs of short-term recovery after a recent sharp drop, with prices bouncing off key support levels. Analysts say this rebound may indicate the worst of the recent sell-off is over, at least for now.
Bitcoin found support at $60,000, which is now acting as a short-term floor. Ethereum, XRP, Solana, and Chainlink have also bounced, suggesting the recovery is affecting the wider crypto market.
The crypto recovery happened at the same time as a small bounce in U.S. stocks. The S&P 500 rose slightly as the week ended, showing that traditional markets and cryptocurrencies often move together. Analysts say this stock market bounce may have helped Bitcoin and other cryptocurrencies start to recover.
While the recent rebound is encouraging, some experts caution that the prior crash was influenced by more than just market sentiment.
BitMEX co-founder Arthur Hayes offered a structural explanation for the decline. He believes the Bitcoin sell-off is not just panic-driven but also linked to dealer hedging related to structured products tied to BlackRock’s iShares Bitcoin Trust (IBIT). As IBIT shares fell sharply, banks and dealers were forced to rebalance their positions, triggering aggressive selling in Bitcoin and related derivatives.
Hayes noted that such mechanical selling can create sudden and dramatic price swings, especially in fragile markets. He is compiling a detailed list of bank-issued notes to identify key triggers that could cause rapid moves in either direction.
Recent spot Bitcoin ETFs have been net sellers, supporting Hayes’ view. Nearly $1.2 billion has flowed out of spot Bitcoin ETFs over the last three trading days, led by BlackRock’s IBIT. Meanwhile, IBIT recorded a record $10 billion in trading volume as its share price fell 13% in a single session, its second-largest daily drop since launch.
Rather than signaling strong demand, this surge in volume reflects stress, hedging, and forced repositioning. It underscores that structural flows are becoming a dominant factor in Bitcoin’s price movements.
Crypto prices are rising as key coins find support, ETF outflows slow, and investor confidence returns alongside stocks.
The decline was driven by structural factors like ETF-related hedging, forced bank selling, and high-volume repositioning.
Yes, large spot Bitcoin ETF flows can trigger mechanical selling and sudden moves, making structural pressures key in crypto volatility.
CoinPedia has been delivering accurate and timely cryptocurrency and blockchain updates since 2017. All content is created by our expert panel of analysts and journalists, following strict Editorial Guidelines based on E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness). Every article is fact-checked against reputable sources to ensure accuracy, transparency, and reliability. Our review policy guarantees unbiased evaluations when recommending exchanges, platforms, or tools. We strive to provide timely updates about everything crypto & blockchain, right from startups to industry majors.
All opinions and insights shared represent the author's own views on current market conditions. Please do your own research before making investment decisions. Neither the writer nor the publication assumes responsibility for your financial choices.
Sponsored content and affiliate links may appear on our site. Advertisements are marked clearly, and our editorial content remains entirely independent from our ad partners.
Ethereum co-founder Vitalik Buterin has quietly made a strong statement about where he thinks crypto…
Bitcoin fell sharply to $60,000 this week, shaking investor confidence, even though the market has…
Crypto markets attempted to stabilize today, with Bitcoin holding above the $67,000 mark and several…
Erebor Bank, a crypto‑friendly financial startup backed by tech investors including Palmer Luckey and Joe…
Ripple’s native token XRP is shifting from a trading-focused crypto asset into a key settlement…
The White House is preparing for another important meeting on February 10 to discuss stablecoin…
