BTC hits $68,500; ETH, DOGE, SOL lead amid crypto short squeeze

Bitcoin BTC$65,121.75 bounced back above $68,500 during Wednesday’s U.S. session, gaining more than 6% over the past 24 hours as deeply bearish positioning across the crypto market began to unwind.

The move sparked a broader relief rally across altcoins. Ethereum’s ether (ETH) surged 10%, reclaiming the $2,000 level for the first time in a week. Solana (SOL), DOGE$0.1049, ADA$0.3088 and Chainlink LINK$9.5029 each advanced more than 10%, outperforming bitcoin and the broad-market benchmark CoinDesk 20 Index’s gains.

With Wednesday’s bounce, BTC now has erased the early-week selloff that saw prices plunging below $63,000. The move follows a period of extremely negative sentiment across the market. The Crypto Fear & Greed Index, a popular sentiment gauge, has been hovering in Extreme Fear levels for most of February.

Perpetual futures funding rates — the periodic payments between long and short traders — had also turned negative multiple times over the past weeks. This means short sellers have been paying longs to maintain positions, a sign that bearish bets had become crowded. Such setups often leave markets vulnerable to sharp squeezes higher when prices begin to rise.

The rebound has liquidated nearly $400 million in leveraged bearish bets across crypto derivatives over the past 24 hours, CoinGlass data shows. Notably, bitcoin perpetual funding rates remain below neutral even amid the rally, suggesting the move isn’t being driven by aggressive leveraged speculation.

Crypto stocks gain

Crypto-related equities also joined the advance. Stablecoin issuer Circle (CRCL) surged 29% following an earnings beat, while Coinbase (COIN) gained 13%. Bitcoin treasury firm Strategy (MSTR) and digital asset investment firm Galaxy (GLXY) advanced 7%-8%. Bitcoin miners — increasingly tied to AI infrastructure themes — were lagging, with Bitfarms (BITF) and MARA Holdings (MARA) standing out with 6%-7% gains.

Many crypto-linked stocks had built up sizable short interest from hedge funds, 10x Research’s Markus Thielen noted, leaving them primed for a sharp reversal.

Improving risk appetite across traditional markets has given a favorable backdrop for the crypto bounce. The S&P 500 and the tech-heavy Nasdaq 100 were 0.7% and 1.2% higher, respectively, in the first half of the trading. The software sector, embattled by AI fears, extended its gains, with the iShares Expanded Tech-Software Sector ETF (IGV) up by another 2% during the session.

Early signs of U.S. buyers returning

For the first time in over 40 days, the Coinbase Premium Index has turned positive again. This index tracks the price difference between bitcoin on Coinbase, a major U.S. exchange, and the broader global market average. It is widely viewed as a gauge of U.S. capital flows, institutional participation, and overall market sentiment.

While the MSTR to IBIT ratio is up 12% year to date, indicating that Strategy has outperformed BlackRock’s ETF. This relative strength points to continued risk-on appetite, even as bitcoin has fallen 25% this year.

In addition, the U.S. spot bitcoin ETFs recorded $257.7 million in inflows on Tuesday, the largest daily total since Feb. 6.

UPDATE (Feb. 25, 17:36 UTC): Updates prices throughout the story.