Bitcoin is showing signs of renewed demand across spot, futures and ETF markets, but the latest data suggest the rally has yet to develop the characteristics of a convincing trend reversal.
While buyers have stepped back into the market over the past week, leverage is declining, investor sentiment remains subdued and macroeconomic risks continue to cast a shadow over the recent rebound.
Buying activity improves, but momentum remains limited
Bitcoin recorded one of its strongest buying sessions of the week on Wednesday, with the cumulative volume delta across spot and futures markets showing approximately $925 million in net buying pressure.
The influx of buyers was strong enough to absorb the post-US CPI pullback without triggering another wave of selling, highlighting that demand has returned at lower prices.
Institutional participation also improved. US spot Bitcoin ETFs attracted $107.7 million in net inflows on Wednesday after adding another $181 million the previous day, extending a short-term recovery in fund flows.
However, two consecutive days of positive inflows alone are unlikely to signal a structural shift after months of inconsistent institutional demand.
Traders are reducing leverage instead of increasing exposure
Perhaps the most telling signal comes from the derivatives market.
Funding rates cooled sharply from as high as 0.22% to just 0.048%, while open interest fell 3.4% from Tuesday’s peak. Under normal bullish conditions, traders typically add leverage as prices rise.
Instead, the latest data indicate that market participants are reducing risk even as Bitcoin holds relatively steady, falling only around 1.5% during the same period.
The behavior suggests traders remain cautious after Bitcoin approached resistance between $65,000 and $66,000 rather than positioning aggressively for a breakout.
External risks continue to dominate
The hesitation is also reflected in broader market sentiment.
Despite Bitcoin recovering roughly 4.4% from its recent low near $62,100, the Crypto Fear & Greed Index remains around 26, firmly within the “Fear” zone.
At the same time, geopolitical uncertainty has intensified following renewed US military involvement in Iran, sending oil prices above $85 per barrel. Investors are also continuing to price in a meaningful probability that the Federal Reserve could raise interest rates by September 2026.
These macro headwinds continue to limit investors’ willingness to increase exposure to risk assets, including cryptocurrencies.
Bulls still have work to do
The week’s data offer reasons for cautious optimism but fall short of confirming that Bitcoin has escaped its broader consolidation phase.
Funding rates have returned closer to neutral, suggesting speculative enthusiasm remains muted. Spot Bitcoin ETFs, despite recent inflows, are still negative on a year-to-date basis, while a cluster of long liquidation levels sits roughly 1.5% below the current market price near $63,200.
For Bitcoin bulls, the recent rebound represents progress rather than proof. Sustained spot demand, stronger institutional participation and improving macro conditions will likely be required before the market can confidently declare that a new uptrend has begun.
