Bitcoin breaks through $78,000, and the market moves out of the extreme fear range

The cryptocurrency market has seen a broad-based rebound. Bitcoin (BTC) is trading above the $78,000 mark, with the overall market cap increasing by roughly 2% in a single day. Fueled by sustained inflows into spot BTC ETFs and easing geopolitical tensions, market sentiment has noticeably rebounded from the extreme panic levels seen at the start of the month.

Short squeezes push prices higher

According to cryptocurrency price data, as of the time of publication, Bitcoin has risen to 79,449.66 yuan; Ethereum (ETH) is up 2.7%, to $2,412.53. Zeus Research analyst Dominick John noted that after the price broke through the key $75,000 level, it triggered the forced liquidation of large amounts of short positions, resulting in a mechanical short squeeze. In addition, spot Bitcoin ETFs have demonstrated strong absorption capacity, maintaining net inflows for three consecutive weeks, with a cumulative amount of $1.8 billion. Activity from institutional holders has also affected market confidence. For example, Micro Strategy’s recent share-purchasing actions have pushed its holdings to surpass BlackRock, making it the largest institutional Bitcoin holder globally, further reinforcing support for the market’s long-term value.

Analysis suggests there is still upside momentum

K33 Research’s research report shows that Bitcoin still has continuing upward momentum in the short term, mainly due to the continued rise in open interest. The analysis points out that although the price has climbed to its highest level in three months, market funding rates have continued to fall, even turning significantly negative. This indicates that short positions are being steadily added; when leverage rates gradually rise and negative funding persists, any upside breakout will trigger larger-scale short squeeze events. K33 believes this pattern—where lows keep getting lifted—reflects the market accumulating potential explosive upward momentum, rather than just short-term random fluctuations.

Market moves out of the extreme panic range

Easing geopolitical conditions are an important factor driving this round of market rebound. The U.S. government announced an extension of the ceasefire agreement with Iran to facilitate follow-up negotiations, easing market concerns about conflict escalation. Although Iran has expressed dissatisfaction with some of the sanctions-related policies, the extension of the ceasefire deadline has indeed given financial markets some breathing room. The “Fear and Greed Index,” which reflects market psychology, has risen from 8 in early April (extreme fear) to 33 (fear). Analyst Dominick John said the index’s rebound indicates that risk appetite is gradually recovering. The market is moving out of extreme pessimism, though it has not yet reached the kind of feverish enthusiasm of blind optimism, and investors remain somewhat cautious.

Despite the clear improvement in short-term sentiment, more macro conditions are still needed to establish a full Bull Market Cycle. LVRG Research Director Nick Ruck said Bitcoin’s current key is whether it can reliably hold the breakout range between $78,000 and $83,000. In addition to the spot market needing to continuously have enough buying demand to absorb supply pressure, strengthening liquidity, increased participation from other mid- and small-cap tokens, and a more stable global macroeconomic environment are all important indicators for judging whether the market can shift from a short-term rebound to a long-term bullish trend.

This article, Bitcoin Breaks Through the $78,000 Mark and the Market Exits the Extreme Panic Range, was first published on Chain News ABMedia.