Bitcoin dropped to $61,300 on Thursday before rebounding 5.52% to $64,690, liquidating over $617 million in long positions and bringing 24-hour total liquidations across all positions to $737 million, per CoinGlass. The selloff came as geopolitical risk spiked before Israel and Lebanon agreed to implement a ceasefire, which coincided with the sharp reversal. Funding on Binance BTC/USDT perps sits at +0.1bp per 8 hours, matching the 30-day average, which indicates the cascade has flushed most overleveraged longs and reset the basis without leaving a significant hangover. Fear and Greed collapsed to 12, well below the 30-day average of 33, suggesting capitulation sentiment is in place.

The liquidation was concentrated in BTC positions and did not trigger meaningful cross-asset contagion — funding on ETH and majors remains stable, and there is no evidence of shared collateral blowouts forcing cascades into altcoins. This was a single-asset leverage flush, not a systemic event. The rebound from $61,300 suggests near-term sellers are exhausted, and the ceasefire news provided a catalyst for shorts to cover and sidelined buyers to re-enter. Trader RidaaXBT noted BTC could stage a relief bounce toward the $69,000 to $70,000 range, which aligns with the technical setup after a sharp washout and funding reset.

Long BTC with a 48-hour horizon targeting $68,000 to $70,000. The liquidation cascade removed the overhang of crowded longs, funding has normalized rather than inverted, and Fear and Greed at 12 marks extreme capitulation conditions that historically precede short-term bounces. The ceasefire provides a fundamental catalyst that removes immediate downside risk, and the 5.52% rebound from the low demonstrates buyers are active at these levels.

Enter on a reclaim of $64,000 with volume, or on a pullback to $62,500 if the initial bounce loses momentum but funding stays neutral. The ideal entry is when BTC holds above the liquidation low of $61,300 and shows clear bid support, confirming the flush is complete. Avoid chasing above $65,500 without a clear breakout above the prior local high, as resistance in the mid-$60,000s could cap the move before the $68,000 target is reached.

Invalidation is a break back below $61,000 on rising volume, which would indicate the liquidation cascade was incomplete and more forced selling remains. A secondary invalidation signal is if funding turns negative below -0.05bp per 8 hours, suggesting the rebound was only a short squeeze rather than genuine buying interest. Stop loss at $60,800 to avoid holding through a continuation of the downtrend if the relief bounce fails.

Watch funding rate and open interest over the next 24 hours — if funding stays flat near +0.1bp and open interest rebuilds steadily, the bounce has legs toward $68,000. If funding spikes back above +0.2bp quickly, the move is overcrowded again and the relief rally will be short-lived. The key signal is whether BTC can reclaim $65,000 with sustained volume, which would confirm the low is in and the path to $68,000 to $70,000 is open.

Source: CoinTelegraph