Bitcoin’s rebound toward $70,000 — trading at $68,000 as Hong Kong hit midday — appears to have been driven more by positioning than conviction, according to market maker Enflux, which said the move largely reflected short-covering after traders leaned bearish amid geopolitical headlines.

“The market is not pricing catastrophe, but it is not pricing resolution either,” Enflux wrote in a note to CoinDesk. “Shorts leaned into the Iran headlines over the weekend, BTC flushed toward 63k, and when escalation did not immediately spiral into a broader regional war affecting the Gulf and Dubai trade corridors, the squeeze began.”

Crypto tends to react faster than traditional assets during geopolitical shocks, Enflux added.

“When bombs drop, or sanctions tighten, capital looks for exit routes. In times of uncertainty, BTC becomes a pressure valve,” the firm wrote.

Institutional demand has remained a key source of support. Over the past five trading days, BTC ETFs have attracted roughly $1.45 billion in net inflows.

Onchain and derivatives indicators suggest the market is stabilizing but not yet regaining strong conviction.

In a recent report, Glassnode wrote that momentum indicators are beginning to recover from recent weakness, with bitcoin’s relative strength index rising to about 41 from 36 the previous week, though still below the neutral 50 level that would signal stronger bullish control.

Spot market conditions have also improved. Trading volume has climbed to roughly $9.6 billion from $6.6 billion the previous week, while buying and selling flows in spot markets have become more balanced, suggesting the earlier wave of aggressive selling has begun to ease.

Derivatives markets remain cautious. Glassnode said the cost of holding leveraged long positions has dropped sharply, while futures trading still shows sellers dominating buyers, signaling continued caution among leveraged traders.

Prediction markets reflect the same cooling of conviction: the probability of bitcoin falling to $65,000 in March has dropped 11 percentage points to 73%, the odds of $60,000 have fallen 10 points to 41%, and a separate Polymarket contract showing bitcoin hitting $60,000 before $80,000 has also weakened, sliding 12 points to 61%.

Together, the data suggests bitcoin has found support for now, but traders remain hesitant to price in either a decisive rally or a deeper selloff.