Bitcoin (BTC) surged to $74,000 on Wednesday, marking a four-week high and hinting at a possible recovery toward the $78,700 monthly close recorded in January, according to CoinGecko data. The rally follows a 22% climb from the $60,000 local bottom on February 6. Despite this price surge, several on-chain and derivatives metrics suggest bears remain comfortable.
Demand for downside protection through Bitcoin options continues to dominate the market. Data from Deribit shows that put options were recently traded at a 10% premium relative to equivalent call instruments. In neutral conditions, this metric typically ranges between -6% and 6%, last observed in mid-January when Bitcoin traded near $95,000.
Professional traders appear concerned about further downside, while demand for bullish BTC futures remains muted. The annualized premium, or basis rate, currently sits below the neutral 5% threshold. This weakness reflects the month-long consolidation following the 32% crash in early February.
Investors face losses and sell pressure
Glassnode data indicates that 43% of circulating Bitcoin is held at a loss based on the price coins last moved. This represents an increase from 30% in late January, when Bitcoin traded at $90,000. Investors holding these losses may gradually exit positions as prices recover, creating persistent overhead sell pressure that could cap further gains.
Meanwhile, the Bitcoin mining sector faces challenges from rising energy costs and declining demand for blockchain processing, partially driven by surging AI workloads. The Bitcoin Hashprice index, which measures the expected daily value of one terahash per second of hashing power, fell to $30 on Tuesday from $39 three months ago. Several major mining firms have reportedly shifted focus toward AI computing and offloaded Bitcoin holdings in the process.
Strategic reserves and market incentives
Strategy remains a notable example of a Bitcoin-centered balance sheet approach. The company purchased 720,737 BTC since August 2020, but faced scrutiny as Bitcoin dropped below its average acquisition price of around $76,000. Other publicly traded entities, including Metaplanet and Twenty One Capital, have encountered similar valuation pressures during the bear market.
Price above the $76,000 cost basis could incentivize stock issuance without diluting current holders. This creates a strong motivation for bears to keep Bitcoin below that level. Recovery toward $78,700 may take time, although momentum could shift if that threshold is breached.
Regulatory clarity and institutional interest support rally
Owen Lau, a financial technology and crypto analyst, said the current rally “has legs,” citing a combination of regulatory progress in the United States and growing integration between traditional finance and digital assets. Lau highlighted inflows into spot Bitcoin ETFs and a wave of short liquidations that have accelerated price momentum.
🚨Clear Street sees potential 'inflection point' for crypto market
— TipRanks (@TipRanks) March 4, 2026
Clear Street analyst Owen Lau believes the crypto market could be an "inflection point" following the 44% decline from October 10, 2025, to February 28, 2026. a Recent developments, including President Trump's…
According to Lau, discussions on crypto market structure legislation and stablecoin regulation are raising expectations for clearer rules in the U.S., which could foster institutional adoption. He also emphasized that major financial firms are increasingly offering Bitcoin ETFs and exploring digital asset services, embedding cryptocurrencies further into mainstream markets.
Signs of a potential bottom
Crypto research firm K33 noted that Bitcoin has shown relative stability despite geopolitical tensions, including the U.S.-Israel conflict with Iran. Analysts observed that the most intense selling pressure has likely passed, though bottoming typically occurs slowly.
K33 Head of Research Vetle Lunde pointed to technical indicators, including Bitcoin’s weekly RSI at 26.84, the lowest since July 2022. He highlighted extreme premiums in bearish options as signs of “extreme impulses of market stress,” historically associated with market bottoms. Lunde emphasized that while the latest sell-off was orderly compared to past crises, the defensive positioning of market participants remains atypical.
“Bitcoin has a tendency to do the unexpected,” Lunde said, suggesting that the combination of regulatory clarity, institutional demand, and oversold conditions could support a broader market recovery.
Gunel Ismayilova
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