Bitcoin Holds $68K as Short Squeeze Meets Nvidia Drag

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The Big Three

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01Session Data

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02Market Commentary

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Bitcoin consolidated around $68,000 on Thursday after briefly testing the psychologically critical $70,000 level earlier in the session — its first approach since late January. The move faded as Nvidia’s 5.5% post-earnings selloff dragged the Nasdaq down 1.18%, reminding the market that BTC’s 60.5% 30-day correlation with the S&P 500 remains a headwind when tech falters. The Bitstamp daily close at $67,999 (+0.76%) still represents a remarkable recovery from the week’s low of $62,500 on Tuesday.

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The narrative on Feb 26 centered on two competing forces. On the bullish side, spot Bitcoin ETFs posted $506.5M in net inflows on Feb 25 — the highest single day in three weeks and a decisive break from the five-week, $3.8 billion outflow streak. BlackRock’s IBIT absorbed $297.4M alone, pushing cumulative historical inflows above $61 billion. No individual ETF posted outflows for the day, a show of synchronized demand that analysts at Kronos Research called “cautious accumulation” rather than conviction buying.

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On the bearish side, the broader context remains grim. Bitcoin is down approximately 46% from its October 2025 ATH of $126,272 and roughly 22% year-to-date. The February selloff — dubbed the “Great Flush” by Outlook India — saw $3.8 billion in cumulative ETF outflows, driven by the unwinding of institutional basis trades, tariff escalation, and quantum computing fears. VanEck‘s analysis noted that BTC’s Feb 5 crash registered a −6.05σ move on the rate-of-change Z-score, among the fastest single-day crashes in crypto history.

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The altcoin market showed clear rotation. ETH, SOL, DOGE, ADA, and LINK outperformed BTC on the day, with Ethereum ETFs drawing $157.1M in inflows and Solana ETFs posting $30.9M — the highest since December 2025. Circle (CRCL) surged 5% and AAVE gained 5.56%, while HYPE added 5.13%. The derivatives market tells a more nuanced story: perpetual funding rates remain below neutral even as prices recover, suggesting the rally lacks leveraged conviction.

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03Technical Analysis

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Daily (1D):

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The daily chart shows BTC consolidating just below the Ichimoku cloud, which spans the $69,616–$70,916 area. Price at $67,999 sits below the Tenkan-sen ($67,949 — nearly flat) and well below the Kijun-sen, indicating the bearish trend structure remains intact despite the recovery. The 200-day SMA at $97,646 is a staggering 43.6% above current price, underscoring how disconnected BTC is from its long-term trend. VanEck noted this represents a −2.88σ distance from the 200-DMA — a level never seen in the past 10 years.

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Momentum is improving but not yet bullish. The MACD lines at −2,971 / −3,730 remain deeply negative, but the histogram has turned positive at +765 and is expanding — the clearest sign of a momentum shift since the selloff began. RSI reads 42.98 (fast) and 36.69 (slow), both recovering from deeply oversold territory but still below the neutral 50 line. A close above the Ichimoku cloud at $70,916 would be the first meaningful technical victory for bulls since January. The Bollinger Bands show price compressing between the lower band at $66,968 and the midline at $70,916, setting up a potential squeeze resolution.

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04Forward Look

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Friday Options Expiry.

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A sizable BTC options expiry on Friday will inject volatility. If the $68,000 strike carries heavy open interest, market makers may pin price near that level, but a clean break in either direction post-expiry could accelerate the move. Traders are watching $66,500–$67,200 for re-entry and $69,500 as the chase level to avoid.

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ETF Flow Sustainability Is the Key Variable.

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Wednesday’s $506.5M inflow was a tactical shift, not yet a structural one. If Thursday and Friday data confirm consecutive inflow days, the narrative could flip from “cautious accumulation” to “institutional re-entry.” But if the Feb 25 print was a one-off driven by short covering, the $3.8B outflow streak resumes and price retests the $63K–$66K zone.

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US PPI and Macro Data.

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Friday’s US producer price index will influence Fed rate expectations. With the 10Y yield at 4.01% and falling, dovish data could compress real yields further and support risk assets including crypto. BTC’s macro sensitivity — 60.5% 30-day correlation with the S&P 500 — means equity direction continues to matter.

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Indiana Crypto Rights Bill.

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Indiana’s House Bill 1042 — banning discriminatory taxes on digital assets and mandating crypto options in state retirement plans by July 2027 — has passed the legislature and heads to the governor. A signing would represent the most crypto-friendly state legislation to date and could catalyze positive sentiment.

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Key Facts

— The short squeeze has done its job — Bitcoin reclaimed $68,000 and briefly tested $70,000 — but the rally now faces its first real test: Can it hold when the squeeze mechanics exhaust? The fact that BTC consolidated near $68K through Nvidia’s 5.5% selloff rather than selling off in sympathy is a constructive sign, suggesting the market has decoupled slightly from its recent pattern of trading as a levered tech proxy.

— The structural picture remains deeply impaired. BTC is 46% below its October ATH. The five-week $3.8B ETF outflow streak — driven by unwinding basis trades and institutional de-risking — erased the narrative of ETFs as a permanent bid. AUM across the US spot complex stood at $87.6 billion as of Feb 25, down from a $170 billion peak in October 2025. Perpetual funding rates remain negative, meaning shorts are still paying longs, and the Fear & Greed Index at 11 confirms that sentiment hasn’t turned — it’s merely stopped getting worse.

— The bull case rests on the MACD histogram turning positive, the RSI recovering from historic oversold levels, and the ETF flow reversal. VanEck’s analysis that BTC is −2.88σ below its 200-DMA — an extreme never observed in the past decade — supports the mean-reversion thesis. But mean reversion requires a catalyst, and right now the most likely one is continued ETF inflows. Watch whether the Feb 25 print was a one-off or the start of a new accumulation phase. A daily close above the Ichimoku cloud at $70,916 would be the first technical green light.

— Bias: NEUTRAL · squeeze mechanics fading · momentum improving but not confirmed · watch $70,916 cloud break and ETF flow continuity