Bitcoin starts independent market movement, is it a rebound or a reversal now?

Federal Reserve Chair Kevin Warsh did not announce an interest rate cut. When discussing inflation, he said that over the past few weeks, inflation expectations and inflation risks have eased. He also reiterated that the Fed will hold the 2% inflation target.

The second half is not dovish, but the market took the first half first. Bitcoin quickly bounced from the lows, moving back toward $60,000. After that, U.S. employment data weakened, rate-hike expectations continued to cool, and the market’s momentum shifted from “repair” to “relay.”

Over the past few weeks, the market’s biggest fear has been that the Fed would keep interest rates at a high level, or even raise tightening expectations again. For Bitcoin, the harder the interest-rate expectations, the narrower the valuation room for risk assets—and the more likely leveraged positions are to be hit and liquidated first.

After Warsh downplayed inflation risks, the market first repriced “rate-hike pressure.” Then, when employment data was weak, this direction got another push. Bitcoin moved back from around $57,742 to above $60,000. The price action looked fast, but in essence, the market was unwinding the previous round of panic trading.

On Deribit, traders concentrated on buying $50,000 put options. Open interest in gold perpetual futures hit a new high. A death cross also reappeared on the technical chart. Several signals stacked together suggest that the market is buying insurance against a decline.

This is different from a normal pullback. In a normal pullback, sellers just want to exit. In a panic defense, traders simultaneously buy puts, buy safe-haven assets, and reduce leverage. When the price hits key levels, liquidations amplify volatility.

CoinGlass data shows that when Bitcoin fell to around $57.7k, it triggered approximately $395 million in liquidations. This figure indicates that the price decline was no longer driven solely by sell-side pressure—it was caused by leveraged positions being forced out.

After positions are forced out, the market is actually more prone to rebound.

The reason is straightforward. The previous drop cleared out some long leverage and pushed defensive sentiment to a high level. Once macro news starts to ease at the margin, prices only need to return near key levels to make shorts nervous. Short covering is, in essence, buying. The higher the price goes, the more it forces additional bearish positions to retreat.

This is the second layer of thrust. When Ethereum and Solana led the rally, Bitcoin briefly pushed toward $62,000, resulting in about $281 million in bearish bets being liquidated.

So this rebound cannot be attributed to just one line from Warsh. A more accurate breakdown is three stages.

First, inflation risks were downplayed, and the market’s concerns about the Fed’s path eased. Second, employment data weakened, continuing to weigh down rate-hike expectations. Third, short positions were forced to cover, pushing spot prices higher—and faster.

If you look only at the first stage, the market is likely to be interpreted as “macro-positive.” If you look only at the third stage, it could be mistaken for a purely technical rebound. The real structure is that both happened in the same period: the macro side provided the reason for prices to rise, and positioning provided the speed of the rise.

The reaction of altcoins also shows that this is not a single-coin story.

After Bitcoin reclaimed $60,000, Ethereum, Solana, and Dogecoin all rose in sync. Subsequently, Ethereum led among major cryptocurrencies, with gains of about 12% over the past week. When capital began to spill over from Bitcoin into Ethereum and Solana, the market stopped trading only the question of whether “Bitcoin can hold.”

CoinMarketCap’s Altcoin Season Index rose to 52/100, the highest level in three months. This level is subtle. It has just crossed the midpoint, showing that risk appetite has indeed returned, but it has not yet reached the stage of full altcoin euphoria.

This is also the first thing to pay attention to. A recovery in altcoin sentiment does not mean that altseason has been confirmed.

A true altseason typically requires broader capital diffusion. Right now, it’s more like after Bitcoin stopped falling, the market first bought back large-cap tokens with good liquidity. Ethereum and Solana managed to run, while some smaller coins remained weak—this kind of divergence is itself a signal.

Second, the options market has not fully believed the rebound.

The put/call skew for BTC and ETH still shows that traders are willing to pay a higher price for downside protection. Prices have already rebounded, but insurance is still not cheap. This detail is colder than the spot price.

If traders truly believed the trend had turned, put option premiums would typically retreat faster. The current situation is more like the spot market has already pulled prices back, while the derivatives market hasn’t put away its umbrella yet.

Third, a short squeeze cannot go on indefinitely.

Short covering brings buying pressure, but that buying is one-time. It can push prices out of crowded lows, but it cannot, by itself, support an entire trend. Once liquidations finish, the market needs fresh spot buying to take over.

So the real question next is not whether Bitcoin has broken through a certain round-number level, but who is still buying after it does. Spot ETF inflows, stablecoin liquidity, and the follow-through strength of Ethereum and Solana will contain more information than a single day’s gains.

Fourth, macro variables are still the same two-edged sword.

This upswing benefited from lower inflation risks and weaker employment. On the flip side, if subsequent data points again to inflation persistence, or if the Fed’s rhetoric turns hawkish again, the market will reprice in the opposite direction using the same logic. Bitcoin is not an asset detached from the macro environment; it simply reacts faster to changes in macro expectations.

Prices have bounced out of excessive defensive positioning, but true confirmation will only come when the options market is willing to remove its insurance.