Nearly $500 million in shorts got wiped out in a single flush. Bitcoin screamed from the low $62,000s back toward $69,000. Twitter went euphoric. And yet, if you actually look at the on-chain data, almost nothing has been fixed.

Let’s be real about what happened on Feb. 25. This wasn’t bulls taking control. This was a mechanical squeeze, a positioning reset dressed up as a rally. The market cleared out overleveraged shorts, ETF flows printed one green day after a string of red ones, and suddenly everyone’s calling a bottom. Don’t fall for it.

Three Mechanics Drove This Move (And None of Them Are “Bull Market”)

There are three specific forces that fueled the bounce. Understanding them is the difference between smart positioning and becoming exit liquidity for whoever sold the top of this relief move.

Risk-On Correlation With Equities

Global equities rallied hard on Feb. 25, driven by tech optimism ahead of Nvidia’s earnings. Bitcoin followed. Perfectly. That’s the problem. Bitcoin continues to trade as a high-beta asset, not as a store of value or digital gold. When the Nasdaq sneezes, BTC catches a cold. Or a bounce. The correlation with real gold and the USD has essentially collapsed toward zero, which means BTC is just a leveraged tech proxy right now. That’s not a bullish structural narrative. That’s a liability when risk sentiment reverses.

One Good ETF Day Doesn’t Erase a Trend

US spot Bitcoin ETFs posted net inflows of $257.7 million on Feb. 24, per Farside Investors data. The day before? A $203.8 million outflow. Zooming out further, Glassnode flags ETF flows as negative year-to-date, a persistent drain that coincided almost perfectly with Bitcoin’s slide from above $100,000 down to the mid-$60,000s. One positive day in a sea of red is not a trend reversal. It’s noise. The kind of noise that gets retail traders excited right before another leg down.

Leverage Reset, Not New Demand

Here’s the thing most people glossed over. Perpetual futures funding rates normalized back toward neutral, meaning the market flushed out its leveraged long and short positions. Options markets spiked in short-dated volatility as BTC approached $62,000, then compressed again once price recovered. That compression, the unwinding of panic hedges, provided mechanical upward fuel. It wasn’t new money entering the market with conviction. It was scared money covering its hedges. Big difference.

The Structural Picture Is Still Ugly. Glassnode Doesn’t Sugarcoat It.

Glassnode’s own language is direct: Bitcoin is “stabilizing, not yet recovering.” Four data points explain why the celebration is premature.

• 9.2 million BTC currently held at a loss. Every relief rally becomes a selling opportunity for underwater holders trying to minimize damage.

• The Accumulation Trend Score sits below 0.5. Large holders, the whales that actually move markets, are not buying with conviction.

• The 90-day Realized Profit/Loss Ratio is below 1.0. That’s a loss regime. Historically, this metric sitting below 1.0 is associated with bear market conditions, not early bull runs.

• Spot Cumulative Volume Delta is sharply negative across Coinbase, Binance, and aggregate venues. Active distribution is still dominating. Sellers are in control of spot markets.

This is a 47% drawdown from all-time highs. That’s mid-to-late bear market depth by historical standards. One $500 million short liquidation event doesn’t change those math.

The Levels That Actually Matter Right Now

Forget the noise. These are the price levels with real structural significance, and you should have them mapped before making any move.

The Floors (Don’t Lose These)

• $65,000-$69,000: The current range bulls need to hold. Reclaiming the top of this band frames today’s move as “range high recovery.” Losing it frames it as a failed bounce.

• $62,000-$62,500: This is the critical line Glassnode flagged explicitly. The Feb. 25 flush tested it and held, which triggered the mechanical rebound. If this breaks on the next leg down, expect a fast move toward the high $50,000s.

• $60,000: Bottom of February’s range. Breaking this shifts sentiment meaningfully toward deeper contraction.

• ~$55,000: Glassnode’s Realized Price, the structural floor anchor. This is where the average BTC holder’s cost basis sits. Losing this would be genuinely catastrophic for sentiment.

The Ceilings (What Bulls Need to Crack)

• $70,000-$72,000: Glassnode is explicit. Failure to reclaim above $70,000 keeps downside risk elevated. Breaking $72,000 would be the first actual signal that the recent weakness is resolving.

• ~$79,200: The True Market Mean in Glassnode’s valuation structure. Reclaiming this level would constitute a genuine regime shift signal, not before.

• $82,000-$97,000 and $100,000-$117,000: Massive overhead supply zones where underwater holders from the prior run will be looking to sell into strength. Even if BTC reclaims $79,200, the road back to all-time highs is littered with exit liquidity sellers.

What a Real Recovery Actually Looks Like (Three Concrete Tells)

Honestly, this part matters more than anything else in this analysis. Because a lot of people will confuse “bounced” with “recovered” and size into positions way too early. So here’s what Glassnode’s framework says you actually need to see before calling this thing fixed.

• Sustained ETF inflows: Not one green day. Multiple consecutive periods of net positive flows that actually reverse the year-to-date outflow trend. That’s the institutional demand signal.

• Spot markets flipping bid-dominant: Glassnode’s Spot Cumulative Volume Delta needs to stabilize and start trending positive. Right now it’s deeply negative. When that flips, it means buyers are absorbing supply rather than sellers dominating.

• Reclaiming the valuation ladder: $70,000 first, then $72,000, then $79,200 True Market Mean. In sequence. With conviction. Anything short of that is just a range-bound grind with downside risk still fully intact.

Pro-Tip: How to Position in a Market That’s “Stabilizing, Not Recovering”

Look, you don’t have to sit on your hands entirely. But you do have to be surgical.

• Range-trade, don’t trend-trade. The $60,000-$69,000 band is well-defined. If you’re nimble, there’s a scalp between $62,000-$65,000 support and $68,000-$69,000 resistance. But this is a trader’s market, not an investor’s market right now.

• Set your invalidation before you enter. A daily close below $62,000 is your hard stop signal. Don’t negotiate with it. The on-chain data says that level failing opens a trap door to the high $50,000s quickly.

• Watch ETF flow data daily. Farside Investors publishes daily ETF flow data. If you see two or three consecutive days of strong net inflows alongside price holding $65,000+, that’s your first signal to start building a more meaningful position. One day means nothing.

• Don’t size heavy until $70,000 is reclaimed on a weekly close. Full stop. Until that happens, every bounce is a potential short entry for more sophisticated players who know where the supply is sitting.

Risk Factor: The Macro Wildcard That Could Wreck This Entire Setup

Between you and me, the biggest risk here isn’t even Bitcoin-specific. It’s the equity market correlation.

Bitcoin bounced partly because Nvidia’s earnings euphoria lifted risk assets broadly. But Glassnode has been flagging something analysts aren’t talking about enough: there are credible signals of a historic stock bubble building in equities, with credit stress quietly intensifying beneath the surface. If equities crack hard, BTC doesn’t get to play the “safe haven” role. It gets sold alongside everything else as leveraged players raise cash. Fast.

A 20-30% equity correction in a compressed timeframe would almost certainly test Bitcoin’s $60,000 floor and potentially its $55,000 Realized Price support simultaneously. That scenario turns this “stabilizing” phase into something much uglier. It’s not the base case. But it’s not a tail risk you can ignore either, especially not with BTC trading as a high-beta proxy for Nasdaq sentiment right now.

The bounce back toward $69,000 was real. The relief was real. The short liquidations were real. What wasn’t real? The structural recovery narrative that got slapped on top of it. Bitcoin is in a range. It’s clearing leverage. It’s waiting. The market doesn’t owe anyone a bull run just because a flush held $62,000.

Hold your levels. Watch the flows. And don’t confuse a short squeeze with a regime change.