Bitcoin pulls back after touching $70,000…analysts say the market is seeing an "insane reversal"

Bitcoin (BTC) is showing a rebound, retouching $70,000 despite heightened tensions in the Middle East.

According to CryptoPotato, a cryptocurrency-focused media outlet, Bitcoin rose as high as $70,125 late in the session on the 2nd (local time) on Coinbase. However, as on the 25th of last month, it met resistance in that zone and has since slipped back to around $68,000.

In the market, this has been described as an "insane reversal." Crypto analyst Bull Theory said, "Just 24 hours ago, extreme fear and panic emerged as U.S. futures markets opened," adding, "But both equities and crypto markets rebounded strongly." He argued that "markets dislike uncertainty more than bad news itself" and that "once uncertainty cleared, prices reflected it quickly."

Macro-analysis channel Milk Road said, "Under the traditional 'risk-off' playbook, Bitcoin should be falling now, but instead it is holding up well," adding, "If this divergence persists even as geopolitical tensions continue, the 'digital gold' narrative could gain traction."

Another analyst, CrediBull Crypto, referenced Russia’s invasion of Ukraine in 2022, saying, "That day marked a local bottom and it rebounded about 40% over the following month." He added, "The initial reaction to war headlines is selling, but it often turns into panic selling at a short-term bottom."

On-chain data also showed no signs of excessive selling pressure. Moreno, an analyst at CryptoQuant, said, "Selling pressure from recent buyers is weakening," adding that "fear appears to be giving way to patience, or fatigue." He noted that "even amid geopolitical clashes, exchange inflows from short-term holders did not rise meaningfully."

Meanwhile, the total cryptocurrency market capitalization rose 2.6% on the day to about $2.42 trillion. The rally was led by Bitcoin, while Ethereum (ETH) also briefly reclaimed the $2,000 level. Gains in major altcoins, however, were relatively limited.

The market expects short-term volatility could increase depending on further developments related to tensions among Iran, Israel and the United States.