Bitcoin Reclaims $73K as ETF Inflows and Short Covering Drive Market Rebound
Bitcoin rallied past $73,000 on Thursday morning, marking its highest level in about a month as the market rebounded from a prolonged stretch of selling pressure.
The leading cryptocurrency had been under strain after logging six consecutive weekly losses and five straight months of declines. However, prices began recovering recently, with the latest move pushing the asset back toward levels last seen in early February.
During the previous trading session, bitcoin briefly approached $74,000 but was unable to break through that threshold. Even so, the upward move signaled renewed momentum after weeks of subdued activity.
Market participants say the rebound appears to be largely driven by traders unwinding short positions rather than a sudden wave of fresh bullish demand. In recent weeks, many investors had positioned themselves for further downside as tensions escalated in the Middle East, fearing the conflict could widen and trigger broader market instability.
When those fears failed to materialize into a larger regional escalation, traders who had bet against bitcoin began closing their positions. The resulting short squeeze helped accelerate the price climb.
Technical factors are also in focus as investors watch whether bitcoin can maintain its footing above the $71,000 level ahead of upcoming U.S. economic data releases. A stronger hold at current levels could signal a shift in the market’s recent trading range, while failure to maintain support may keep prices fluctuating within a broader consolidation zone.
Institutional demand has also played a notable role in supporting the market. Spot bitcoin exchange-traded funds listed in the United States have recorded approximately $1.45 billion in combined net inflows over the past five trading sessions.
Daily flows have remained strong as well, with about $458 million entering these funds on March 2, followed by another $225 million on March 3. The steady capital inflow suggests institutional investors are continuing to accumulate exposure despite recent volatility.
On-chain metrics indicate signs of stabilization, though sentiment remains cautious. Momentum indicators have improved modestly, with bitcoin’s relative strength index rising from 36 last week to around 41.
Trading activity in spot markets has also picked up. Daily spot volume climbed to roughly $9.6 billion, compared with $6.6 billion previously, reflecting increased participation as prices recovered.
Derivatives markets, however, still suggest defensive positioning among traders. Funding rates on perpetual futures remain negative, indicating many investors are still hedging or betting on downside. Meanwhile, open interest across major futures contracts has increased, signaling that traders are actively adjusting positions rather than aggressively chasing the rally.
Elsewhere in the policy arena, tensions continue between the banking sector and crypto industry over U.S. stablecoin legislation.
President Donald Trump recently criticized major banks, arguing they are attempting to weaken the stablecoin framework established under the GENIUS Act. The dispute centers on restrictions preventing stablecoin issuers from paying direct interest to holders.
Banks argue the rule could be bypassed through third-party reward programs, potentially giving stablecoins an unfair advantage in payments. Meanwhile, crypto advocates maintain that incentives are essential for stablecoins to compete with traditional financial products.
The disagreement has complicated discussions around broader digital asset regulation, including proposals such as the Clarity Act, which aims to establish clearer rules for the crypto market structure.
Despite the policy friction, bitcoin’s price action suggests the market may have found short-term support. Strong ETF inflows, improving momentum indicators, and reduced selling from long-term holders have helped stabilize the asset after months of downward pressure.
At the time of writing, bitcoin is trading near $73,050, with traders closely watching whether the current rally can extend beyond the $74,000 resistance level.