Bitcoin is staging a notable recovery this week, climbing back above the 75,000 handle even as geopolitical tensions in the Middle East remain elevated. The move challenges the typical risk-off playbook, where escalating conflict would normally pressure crypto assets. Instead, improving sentiment as oil stabilizes has helped, but the rebound appears to be driven more by positioning than a fundamental shift in macro conditions.
The key driver is a short squeeze. Earlier this month, sentiment had turned decisively bearish amid the Iran conflict, with expectations that Bitcoin would revisit the 60,000 level. However, sellers failed to push prices lower, and that failure forced traders to unwind short positions built up since late 2025. The resulting squeeze has extended the upside move, lifting Bitcoin back above key technical levels.
Technically, a solid base appears to have formed at 59,866 in February, just ahead of 61.8% retracement of 15,452 (2022 low) to 126,289 (2025 high) at 57,791. The break above the 55 D EMA (now at 73,584), marks an important shift in near-term momentum and opens the path for further recovery. The next key level to watch is 80,492, a former support that has turned into resistance.
However, the upside may remain capped in the near term. Strong resistance is expected in the 80,000–85,000 zone, where the psychological barrier aligns with the 38.2% retracement of 126,289 to 59,866 at 85,239. Failure to sustain gains above current levels, particularly a break below 70,000, would signal that the rebound has run its course and shift focus back toward the 59,866 low.
