TL;DR:
- The leading cryptocurrency recovered 15% from its intraday lows, once again crossing the $71,000 mark.
- The movement liquidated over $120 million in short positions in just one hour, halting a structural decline.
- Bitcoin futures RSI fell below 21, an oversold level that historically precedes strong relief rallies.
A dramatic turn hit the crypto market this February 6 as Bitcoin rebounded to $71K, a shift that led the pioneer to recover nearly all gains erased following post-election volatility. After briefly falling below $60,000, the crypto staged a 15% recovery that restored its market capitalization to over $1.4 trillion.
Friday’s surprise rally was driven by a massive “short squeeze” that swept away bearish bets in record time. Therefore, the exhaustion of sellers coincided with a shift in sentiment across U.S. stock indices, which also reacted upward after a week of intense institutional corrections.
Macroeconomic Factors and the Importance of the RSI
Experts at VanEck stated that mathematical exhaustion was key, as the RSI dropped to historically low levels of 21 points. Consequently, bargain hunters were drawn in by the technical oversold conditions, taking advantage of the capitulation of leveraged investors to push the price back to psychological levels.
On a macro level, the announcement of the Reciprocal Trade and Investment Agreement between the U.S. and Argentina served as an additional catalyst for global stability. This pact provided a breather for industrial and technological markets, providing the necessary tailwind for capital to rotate back into risk assets and cryptocurrencies.
In summary, while labor uncertainty and doubts about AI spending persist, Bitcoin managed to establish a firm floor. Analysts warn that the current dynamic depends more on leverage management than on traditional cycles, making the monitoring of support levels crucial in the coming sessions.
