Bitcoin Surges 12% as Coinbase Premium Indicates Renewed Buying Interest
By John Nada·Feb 9, 2026·5 min read
Bitcoin's recent 12% rise signals a potential short-covering rally, with experts cautioning about sustainability amid ongoing macroeconomic pressures.
Bitcoin has surged 12% from its recent low, coinciding with a notable increase in the Coinbase Premium index. Experts suggest this recovery may reflect a classic dead cat bounce, driven primarily by short-covering and a squeeze, according to Decrypt.
The cryptocurrency market has stabilized after last week's sell-off, with Bitcoin rebounding to a price that reflects improved U.S. investor appetite. The leading cryptocurrency is currently trading at $70,998, up from a Friday low of $62,822, according to CoinGecko data. The Coinbase Premium index, which tracks the price difference between Bitcoin on Coinbase and Binance, has increased over 70%, rising from -0.23% on Friday to -0.06% as of early Asian trading on Monday. This uptick indicates renewed buying interest from U.S. investors, suggesting a shift in market sentiment.
Market analysts highlight the potential for this bounce to be a technical reaction to an oversold market rather than a sign of fresh demand. Ryan Yoon, a senior analyst at Tiger Research, noted that the Fear & Greed Index hitting an extreme low of 5 suggests that this rally is primarily driven by short-covering. The index's low point indicates that market sentiment has shifted dramatically, prompting traders to react quickly to market movements.
Further analysis reveals that the derivatives metrics show bearish traders closing their positions, rather than new bullish positions being opened. Aggregated open interest—the total number of open derivatives contracts—has declined, while the cumulative volume delta has turned positive. Such a combination typically indicates that investors are primarily closing short positions. This development is critical as it signifies a reaction to previous market panic rather than an influx of new investment capital.
Andri Fauzan Adziima, a research lead at Bitrue, emphasized that the current rally is largely a response to previous capitulation rather than a clear indication of robust demand. “This rally is mostly short covering and a short squeeze after the capitulation flush,” said Adziima. He pointed out that while open interest deleveraging cleared longs and the spot cumulative volume delta turned upward, the current market conditions reflect relief mechanics rather than fresh demand. This highlights the importance of understanding the underlying mechanics of price movements in the cryptocurrency market.
As the market attempts to recover, the easing of regional pressures following Japan's election victory has contributed to a more favorable environment. The Nikkei 225 index, a key indicator of Japanese equities, showed a significant uptick of 5% following Prime Minister Sanae Takaichi's landslide election win. This positive development has alleviated some regional risk-off pressure, allowing for a more stable trading environment. However, analysts remain cautious, noting that a sustained recovery depends on U.S. economic data and broader macroeconomic trends.
Experts maintain that the recent uptick lacks sustained demand, as highlighted by the negative Coinbase Premium index and ongoing macroeconomic headwinds. Jeff Mei, COO at BTSE, noted that the recent tech earnings reports have contributed to market volatility, but their conclusion could lead to a more stable environment for cryptocurrencies. The interplay between tech sector performance and cryptocurrency prices is an essential factor for investors to consider, particularly as tech stocks have a significant influence on overall market sentiment.
Looking ahead, the upcoming U.S. economic data releases will be crucial in shaping the future of Bitcoin's price trajectory. Analysts are closely monitoring these figures, as positive growth indicators such as lower unemployment and inflation could bolster confidence in the crypto market. The correlation between economic performance and cryptocurrency values underscores the importance of macroeconomic conditions in determining market direction.
The current recovery in Bitcoin's price appears to be a reaction to short-covering rather than a sign of renewed demand. While some analysts express optimism about potential rebounds driven by institutional adoption and supportive regulatory policies, they stress that a definitive trend reversal will require substantial structural demand for Bitcoin. Nick Ruck, director of LVRG Research, pointed out that a rebound may occur this year as institutional adoption advances while global regulators enable friendlier policies for real-world assets (RWAs) and stablecoins.
For a definitive trend reversal, experts emphasize the need for robust, structural demand, such as nation-state strategic reserves positioning Bitcoin as a legitimate alternative to gold. Yoon's comments highlight the necessity for an underlying framework that supports long-term growth in the cryptocurrency market.
Other experts point to a clearing of overhanging risks, suggesting that the recent crash has led traders to deleverage their positions. Mei explained that the decline in open interest indicates a market that is adjusting to recent volatility. “We think that the crash has simply led traders to deleverage their positions, which is why you see open interest falling,” he said. This adjustment is a natural response to the uncertainties that have plagued the market.
As the market navigates these fluctuations, the overall sentiment remains cautious. Despite the recent recovery, analysts warn that the underlying economic landscape continues to present challenges. The negative Coinbase Premium index serves as a reminder that while short-covering can lead to rapid price increases, it does not equate to a sustainable demand environment.
Investors will need to keep an eye on broader economic indicators to gauge whether this rally can be sustained or if it will fade into another market correction. The next few weeks will be pivotal in determining the long-term outlook for Bitcoin and the cryptocurrency market overall. The combination of macroeconomic data, investor sentiment, and technical indicators will play a crucial role in shaping market dynamics in the near future.
As Bitcoin and the broader cryptocurrency market continue to evolve, staying informed about developments in both the macroeconomic landscape and the cryptocurrency ecosystem will be essential for investors. The interplay of these factors will ultimately define the trajectory of Bitcoin's price movements and the overall health of the cryptocurrency market.