Bitcoin climbed above $72,000 during early trading hours, marking its highest level in roughly one month as markets reacted to institutional flows and easing geopolitical fears.
The rally follows a prolonged downturn in which the cryptocurrency suffered six consecutive weekly losses and five months of declining price action.
Market data shows the asset briefly approached the $70,000 level a day earlier but failed to break through resistance before the Asian trading session on March 4 triggered the breakout.
Traders reported that much of the upward momentum stemmed from the unwinding of bearish positions rather than a sudden surge in new buying activity.
Many investors had previously built heavy short positions after fears emerged that tensions involving Iran could escalate into a broader Middle East conflict.
When those geopolitical fears did not develop into a wider confrontation, traders holding short positions were forced to close them, which accelerated the upward move in bitcoin.
Analysts also pointed to improving macroeconomic expectations that could provide additional support for risk assets such as cryptocurrencies.
“If BTC holds above 71k through Friday’s NFP print and builds continuation, the range structure shifts materially. A soft payrolls number would likely reinforce rate cut expectations ahead of the March 18 FOMC decision, providing a macro tailwind at the margin. However, if this level fails to hold as it has before, the 60k to 71k range remains intact, and fading the edges is the more defensible positioning until a clear direction is confirmed,”
Nicolai Søndergaard said.
Institutional investment flows have also contributed to stabilising the market after months of downward pressure.
U.S.-listed spot bitcoin exchange-traded funds recorded approximately $1.45 billion in net inflows over the past five trading sessions.
ETF demand remained strong on a daily basis, with around $225 million entering the funds on March 3 following an even larger inflow of roughly $458 million the day before.
Blockchain analytics firm Glassnode reported signs that market momentum indicators are beginning to recover after weeks of weakness.
The firm noted that bitcoin’s relative strength index climbed to 41, up from 36 during the previous week, indicating improving sentiment among traders.