Bitcoin surged past $70,000 after a sharp rebound in risk assets, but options traders suggest investors still expect further downside.
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| Bitcoin’s rebound coincides with tech and precious metals recovery, but the options market signals caution as crypto remains volatile. Image: CH |
Tech Desk — February 7, 2026:
Bitcoin’s dramatic bounce back above $70,000 on Friday offered a temporary reprieve for the cryptocurrency market, but the broader context suggests the rally may be more of a stabilizing breath than a decisive recovery.
The world’s largest cryptocurrency climbed as much as 11% during the session, hitting $71,464.96 after earlier falling to $60,017.60—its weakest level since October 2024. The one-day surge marked bitcoin’s largest gain since March 2023, but it still leaves the asset down roughly 8% for the week and far below its record highs.
The rebound came alongside a broader stabilization in risk assets. Technology stocks and precious metals both rallied after a global selloff had hammered markets. Gold and silver surged on Friday, with silver up 8.8% and gold rising about 4%, helping soothe the risk-off mood that had pressured crypto and other speculative assets. Meanwhile, the S&P 500 and Dow Jones surged, buoyed by gains in Nvidia and other AI-related chipmakers.
That alignment with tech and metals is not new for bitcoin. The asset has increasingly behaved like a risk-on instrument, reacting to liquidity conditions and investor sentiment tied to growth stocks. The rally shows how quickly crypto can recover when risk appetite returns—but it also underscores how fragile the recovery remains when the market’s broader mood is still uncertain.
Investors, however, are treating the bounce with caution. The options market suggests many traders are still bracing for further declines, with demand for downside protection spiking. Data from decentralized options platform Derive.xyz showed a significant buildup of put open interest at the $60,000 to $50,000 strikes for the February 27 expiry—indicating bets that bitcoin could revisit those levels by then.
“It’s a one-way market. Demand for downside protection is extreme,” said Sean Dawson, head of research at Derive.xyz. His comment captures the prevailing mood: while the rally may be real, traders are positioning for the possibility that the market’s grind lower may continue.
This caution reflects the longer-term picture for the crypto market, which has lost about $2 trillion in value since peaking at $4.379 trillion in early October. More than $1 trillion of that was wiped out in the past month alone, even as Friday’s bounce reduced some of the immediate damage.
Crypto sentiment has also been affected by the volatility in traditionally “safe haven” assets like gold and silver. Some investors see the sharp corrections in those markets as a warning sign that leveraged positions and speculative narratives have run ahead of reality—an idea echoed by Joshua Chu, co-chair of the Hong Kong Web3 Association. He argued that the decline in bitcoin is a correction for traders who treated the asset as a one-way bet without adequate risk controls.
Still, there are reasons to view the rally as more than a fleeting rebound. Crypto investors point to bitcoin’s history of sharp drawdowns followed by recoveries. Anthony Pompliano, a prominent crypto investor, noted that bitcoin has endured 50% drawdowns roughly every 18 months over the past decade, suggesting that such volatility is intrinsic to the asset class.
In the near term, the key question is whether the market can hold above the $70,000 level or whether the put-heavy options market will prove prescient. A sustained rebound would likely require renewed confidence in risk assets, continued momentum in tech stocks, and a stabilization of broader market liquidity.
For now, the rally highlights a central truth of the current crypto cycle: recovery is possible, but the market remains tethered to wider risk sentiment—and investors are still betting on downside.