Bitcoin’s recent rebound toward the $70,000 level appears to be driven more by technical positioning than a strong shift in market sentiment, according to market maker Enflux. The firm said the move largely reflects traders closing short positions after turning bearish during the latest geopolitical tensions.

The cryptocurrency was trading around $68,000 by midday in Hong Kong, recovering from a weekend drop that briefly pushed prices toward $63,000. Enflux said traders had built short positions following headlines tied to tensions involving Iran, but the market began to recover once it became clear the situation had not escalated into a broader regional conflict threatening key Gulf trade routes, including those connected to Dubai.

“The market is not pricing catastrophe, but it is not pricing resolution either,” the firm wrote, noting that the rebound started once bearish bets began to unwind.

According to Enflux, crypto markets often react more quickly than traditional assets during geopolitical shocks because they trade continuously and allow investors to reposition immediately during periods of uncertainty.

Institutional demand has also helped underpin prices. Over the past five trading sessions, spot bitcoin exchange-traded funds have attracted about $1.45 billion in net inflows, providing a steady source of buying interest despite recent volatility.

Data from blockchain analytics firm Glassnode suggests the market is stabilizing, though conviction remains cautious. Momentum indicators are beginning to recover from recent weakness, with bitcoin’s relative strength index rising to roughly 41 from around 36 the week prior. However, the indicator remains below the neutral 50 threshold typically associated with stronger bullish momentum.

Spot market conditions have also improved. Trading volumes have climbed to around $9.6 billion from $6.6 billion the previous week, while buying and selling flows have become more balanced, suggesting that the earlier wave of aggressive selling is starting to subside.

Derivatives markets, however, continue to signal caution. Glassnode noted that the cost of maintaining leveraged long positions has dropped sharply, while futures data still shows sellers outweighing buyers, indicating that leveraged traders remain hesitant to rebuild bullish exposure.

Prediction markets reflect the same uncertainty. On Polymarket, the probability of bitcoin falling to $65,000 in March has declined by 11 percentage points to 73%, while the odds of a drop to $60,000 have slipped 10 points to 41%. Another contract tracking whether bitcoin will reach $60,000 before $80,000 has also weakened, falling 12 points to 61%.

Taken together, the indicators suggest bitcoin has found near-term support after its recent decline. However, traders remain reluctant to price in either a sustained rally or a deeper correction as geopolitical risks and macro uncertainty continue to shape market sentiment.