"Bitcoin rebound looks like short covering…sustainability remains in question"

After last week’s sharp selloff, the crypto market appears to be regaining some stability, but caution remains prevalent over the durability of Bitcoin’s (BTC) rebound.

According to Decrypt on the 8th (local time), Bitcoin has risen about 12% from last Friday’s low of $62,822 and is now trading around $71,000. This rebound coincided with a partial improvement in indicators of U.S. investor demand. Based on Coinglass data, the Coinbase Premium Index quickly recovered from -0.23% to around -0.06%, suggesting some return of buying pressure from U.S. investors.

However, derivatives indicators point to the view that this rise is closer to short-position unwinding than a structural recovery in demand. Open interest declined, while cumulative volume delta (CVD) turned positive. This is typically interpreted as a classic short-covering phase in which prices are pushed higher as existing short positions are liquidated, rather than by inflows of new long positions.

Experts are characterizing the move as a “relief rally.” They argue it is likely a technical rebound from oversold territory following large-scale liquidations, and that substantive new demand has yet to be confirmed given the Coinbase premium remains in negative territory. The global macro environment also continues to weigh.

Analysts say the path forward will hinge on macro data and whether institutional demand recovers. In the near term, volatility may ease as deleveraging progresses to a significant extent, but a trend reversal will require structural capital inflows and a clear improvement in the macro backdrop.