Bitcoin tops $71,000 as short squeeze fuels rebound after Iran crisis

13:20

By: Dakir Madiha

Bitcoin tops $71,000 as short squeeze fuels rebound after Iran crisis

Bitcoin climbed sharply on Wednesday, rising more than 6 percent to surpass $71,000 for the first time since early February as a wave of short liquidations and renewed institutional demand fueled a rapid market rebound.

The cryptocurrency traded near $71,018 during morning trading, according to data from CoinGecko cited by Stocktwits. The rally triggered widespread liquidations in the derivatives market, with CoinGlass data showing more than $100 million in crypto positions wiped out within a single hour. Approximately $97 million of those liquidations involved traders betting on falling prices.

Major altcoins also advanced during the surge. Solana recorded some of the strongest gains among large digital assets, while Ethereum climbed back above $2,000 for the first time in three weeks.

The recovery follows strong inflows into U.S. spot Bitcoin exchange traded funds, signaling renewed institutional interest. On March 2, these ETFs recorded net inflows of roughly $458 million, one of the largest daily totals of 2026, according to data from SoSoValue.

The iShares Bitcoin Trust attracted the largest share of investment with about $263 million in inflows. The Wise Origin Bitcoin Fund added $94.8 million, while Bitwise funds received approximately $36.4 million. None of the twelve spot Bitcoin ETFs reported outflows that day.

The surge in ETF demand ended a five week period of withdrawals that had seen nearly $4 billion leave digital asset investment products, according to CoinShares. Data from CryptoQuant also showed that U.S. spot Bitcoin ETFs recorded a positive weekly net inflow of about 9,100 BTC the previous week.

Bitcoin’s rebound follows a sharp decline triggered by geopolitical tensions at the end of February. On February 28, the cryptocurrency dropped as much as 3.8 percent to about $63,038 after the United States and Israel launched large scale air strikes across Iran, including targets in Tehran.

In the immediate aftermath of the strikes, the global cryptocurrency market lost roughly $128 billion in market capitalization, according to CoinGecko. Reports later confirmed that Iran’s Supreme Leader, Ayatollah Ali Khamenei, had been killed during the attacks.

Despite the initial selloff, Bitcoin recovered quickly. Prices climbed back to around $69,000 by March 2 before fluctuating between $66,000 and $68,000 on Tuesday as rising oil prices and falling equity markets created broader financial uncertainty.

Market analysts said several indicators pointed to an oversold market. K33 Research noted that negative funding rates and strong ETF inflows suggested conditions were forming for a rebound.

On chain analysts have also observed that cryptocurrency markets appear to be adapting more quickly to geopolitical risk than in previous crises. During earlier tensions involving Iran in April 2024, Bitcoin fell about 8 percent but recovered within 48 hours.

Bernstein analysts continue to maintain a long term price target of $150,000 for Bitcoin by 2026. They noted that ETF outflows during the recent correction remained below 5 percent, indicating continued institutional confidence in the asset.

However, some analysts remain cautious. Crypto analyst Benjamin Cowen warned that historical patterns during U.S. midterm election cycles suggest rallies in early March can sometimes prove temporary before markets weaken later in the spring.