Bitcoin has recovered from last week’s sharp decline. The cryptocurrency is now trading around $70,400 after hitting a low of $62,822 on Friday.
The rebound represents a 12% gain in just a few days. According to CoinGecko data, bitcoin reached $70,998 during early Asian trading on Monday.
The recovery comes as U.S. investor appetite appears to be improving. The Coinbase Premium index, which tracks the price difference between Coinbase and Binance, jumped over 70% since Friday.
The index moved from -0.23% on Friday to -0.06% on Monday. This shift suggests American investors are returning to the market.
Analysts warn the rally may not last. Ryan Yoon, senior analyst at Tiger Research, told Decrypt that the Fear & Greed Index hitting an extreme low of 5 indicates a technical reaction.
“This bounce is a powerful short-covering rally and a technical reaction to an oversold market washout,” Yoon said. Derivatives data supports this view.
Aggregated open interest has declined while cumulative volume delta turned positive. This pattern typically shows traders closing short positions rather than opening new long ones.
Andri Fauzan Adziima, research lead at Bitrue, explained the mechanics. “This rally is mostly short covering and a short squeeze after the capitulation flush,” he said.
A short squeeze happens when bearish traders are forced to buy back bitcoin to limit losses. This buying pressure can push prices higher temporarily.
Honestly, you just have to laugh at this point. You’d think people would learn by now, but apparently not.
This entire move up has been largely short driven, with funding sitting around -0.02 during the rally. That tells you a lot.
As shorts close and price pushes… pic.twitter.com/gZkE537Rmi
— Killa (@KillaXBT) February 6, 2026
The bounce follows a brutal week for bitcoin. The cryptocurrency fell below $76,000, dropping below Strategy’s average purchase price.
Strategy, formerly known as MicroStrategy, has invested over $54 billion in bitcoin over five years. The company was reportedly down about 3% on its investment as of this week.
CNBC host Jim Cramer sparked market speculation during a live broadcast. He suggested the Trump administration might have purchased bitcoin at $60,000 for the U.S. strategic reserve.
JUST IN: Jim Cramer says President Trump purchased Bitcoin for the US strategic reserve during the crash this week.
"I heard at $60k he's gonna fill the Bitcoin Reserve."
If Jim Cramer says bearish its could be bullish for us!
seems we will have a small bounce here pic.twitter.com/mvLtNs8QCD
— Whale Degen (@hiwhaledegen) February 7, 2026
“I heard at $60,000, [Trump] is going to fill the bitcoin reserve,” Cramer said. The clip went viral across social media platforms.
However, no official confirmation has been provided. The White House has previously stated the strategic reserve will only be expanded in a “cost-neutral” manner.
Treasury Secretary Scott Bessent told lawmakers this week that he lacks authority to invest tax dollars in bitcoin. “I am secretary of the Treasury, I do not have the authority to do that,” Bessent said during testimony.
Bessent confirmed the government retains seized bitcoin that has grown in value. The $500 million in retained bitcoin has increased to over $15 billion, he stated.
Long-time bitcoin skeptics used the recent decline to criticize the asset. The Financial Times published multiple articles questioning bitcoin’s value proposition.
Peter Schiff, a gold advocate, pointed out that bitcoin has fallen to 15 ounces of gold. This represents a 59% decline from its November 2021 high when priced in gold.
Despite the criticism, some analysts remain optimistic about longer-term prospects. Nick Ruck, director of LVRG Research, expects a potential rebound this year as institutional adoption continues.
Jeff Mei, COO at BTSE, believes the crash led traders to reduce leverage. “We think that the crash has simply led traders to deleverage their positions,” Mei told Decrypt.
The broader market context includes a rally in Asian equities. Japan’s Nikkei 225 jumped 5% after Prime Minister Sanae Takaichi’s election victory.
Bitcoin is currently trading at $70,400 according to the latest market data.
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