On April 13, after several consecutive days of decline, Bitcoin reached a local low of $70,678, while the Fear and Greed Index fell in sync to 12, putting the market into an “extreme fear” state. After Ethereum hit a trough of $2,164 on April 9, the two major mainstream assets entered a low-volume consolidation channel at the same time. The turning point came on April 18: Ethereum first surged to a peak of $2,451, and then Bitcoin briefly broke above $78,000 on April 20 before falling back to just above $74,000 to build momentum. As of April 22, Bitcoin reclaimed $78,000 with a 24-hour gain of 2.85%; Ethereum was above $2,400.85, with a 24-hour gain of 3.58%.
The driving logic behind this price action can be broken down into three dimensions: a macro catalyst—news that “Trump extends the Iran ceasefire”—boosted market confidence, pushing Bitcoin up about 2.7% in a single day; on-chain, the funding rate shifted from negative to positive, accelerating short liquidations and short covering; and spot ETFs recorded 5 straight days of net inflows, providing bottom-supporting absorption power.
Liquidation Data Reveals Who Is Paying the Cost of the Bounce
The structural cost of a V-shaped reversal is often borne by leveraged markets. On April 22, data showed that over the past 24 hours, the total liquidation volume across the entire network reached $270 million, involving about 112k investors. The amounts liquidated for long and short positions were nearly split evenly—long liquidations totaled $133.91 million, while short liquidations totaled $136.09 million—suggesting that the direction for the longer cycle remained unclear. However, looking at the 4-hour window reveals a distinctly different structure: short liquidations were $23.21 million, while long liquidations were only $9.05 million, meaning shorts accounted for as much as 71.98%. This implies that in the fast rebound over the short term, a large portion of leveraged short positions were swept away. Specifically, after the price broke above $78,000, a Bitcoin short “whale” was liquidated for roughly $3.11 million; this was the eighth liquidation for that address within the past week. It then reopened a short position with 40x leverage using the remaining $30k of capital, with the liquidation price for the new position set at $79,085, showing that even during the rebound, the long-versus-short battle has not ended.
Fear and Greed Index Rises From 12 to 32
As an emotional indicator that mirrors leveraged market behavior, its evolution path also provides key grounds for judgment. On April 13, the Fear and Greed Index fell to 12, after the index approached historical extreme territory again—following its early-April dip to 11. This value indicates that the market has been in “extreme fear” for more than 20 consecutive days, which is the longest continuous fear cycle since 2026. As of April 22, the index rebounded to 32. While it remains in the “panic” range, it has already moved away from the lows seen earlier in the month. The rebound from 12 to 32—about 20 points—represents a medium-strength emotional repair within historical cycles, far from reaching the “greed” threshold of 50. From the perspective of retail behavioral finance, emotional repair after extreme fear typically unfolds in three stages: first, price rebound driven by short covering (already completed); second, investors in a wait-and-see mode begin to test with small entries (currently happening); third, incremental re-entry following trend confirmation (not yet seen). Right now, the market is in the transition band between the first and second stages.
Divergence in Long/Short Structure
The divergence between the funding rate and open interest further confirms a split in market structure. Bitcoin perpetual futures open interest increased by 5.79% within 24 hours, reaching $8B, indicating that leveraged trading activity has clearly rebounded. However, the long/short ratio diverged significantly across different time dimensions: in the 24-hour window, long and short liquidations are nearly even, but in the 4-hour window, shorts account for as much as 72% of liquidations—reflecting that the short-term rebound is mainly driven by short closing, not by a systemic influx of new long positions. A typical feature of this kind of divergence is that the sustainability of a short-term rebound depends highly on whether the funding rate can remain in a positive range. If the momentum from short covering runs out and new buy orders do not step in to replace it, the market may revert to range-bound action. Correspondingly, on-chain data also shows localized presence of long-side strength: on April 22, a Bitcoin whale opened a $27.4 million 10x leveraged long position at a $76,272 average price and set batch take-profit sell orders from $78,200 to $85,560. This cash-out strategy covers a price range of about $7,360, indicating a strategically planned long positioning.
On-Chain Signals
The direction of institutional-grade capital is even more worth watching. Data on April 22 showed that Bitcoin spot ETFs have recorded net inflows for 5 straight days. Net inflows on April 16 reached $411.5 million in a single day, with BlackRock’s IBIT contributing $214 million. Cumulative net inflows year-to-date in 2026 have turned positive to about $245 million. Ethereum spot ETFs show similar sustained capital attraction: as of April 21, they have recorded net inflows for the ninth consecutive day, with a single-day net inflow of $43.36 million, including BlackRock’s ETHA contributing $37 million. Meanwhile, over the recent week, MicroStrategy spent $2.54 billion to add 34,164 BTC, bringing its total holdings to 815,061 BTC and surpassing BlackRock to become the largest corporate Bitcoin holder. ETF inflows and corporate buying are moving in tandem, forming a clear gradient distribution compared with the still cautious sentiment on the retail side—institutions and high-net-worth investors are accumulating positions in the bottom region, while retail participation has not yet significantly rebounded.
Macro-Driven Factors
Macro-level news has become the direct catalyst for this round of rebound. On April 22, US President Trump announced an extension of the Iran ceasefire agreement, directly driving Bitcoin up about 2.7% on Wednesday; during the move, it briefly touched a two-month high of $78,344. Ethereum’s highest gain during the same period reached 2.8%, reflecting a strong linkage between mainstream assets and the macro risk narrative. But macro is not a one-way positive—markets still need to deal with uncertainty around the Fed’s policy adjustments. Federal Reserve Chair Jerome Powell’s term ends on May 15. The market generally views Trump’s nomination as a more hawkish Kevin Warsh taking over, and ongoing uncertainty about policy direction continues to suppress valuation space for risk assets. In addition, CME BTC/ETH options expire on April 24, just 4 days before the Fed FOMC meeting. The concentration of derivative expiries overlapping the macro policy window could increase market volatility in the short term.
Sustainability of the Rebound
Whether the current rebound can upgrade from a “technical correction” to a “trend reversal” depends on three core conditions. First, the leveraged structure needs to shift from a “short-covering dominant” mode to a “longs actively adding” mode. The current structure—where 72% of 4-hour liquidations are shorts—means the early rebound momentum mainly comes from shorts getting closed. If longs do not take over quickly, the market may enter a second dip. Second, the Fear and Greed Index needs to break above the 40-point level to confirm that sentiment repair has entered the second stage. Based on historical data, after an extreme fear (<15) rebounds to panic (30–40), if the index fails to rise further into the neutral region (40–50) within 20 trading days, it is often accompanied by a second dip. Third, the macro risk narrative needs to shift from the short-term driver of “geopolitical conflict easing” to expectations of more sustainable liquidity improvement. Sustained ETF inflows are a positive signal, but if uncertainty in the Fed’s policy direction is not resolved, the pace of inflows could slow at the margin.
Qualitative Market Structure
Taking all the above analysis together, as of April 22, the market condition can be characterized as a “technical rebound driven by short covering, accompanied by tentative structural long positioning.” Bitcoin rebounded from $70,678 to above $78,000, with a cumulative gain of more than 10%. Yet in the 24-hour window, long/short liquidations are almost balanced, indicating that a consistent expectation for the longer-cycle direction has not formed. This judgment also needs to be viewed within a longer time framework: historically, extreme fear sentiment (Fear and Greed Index <15) is often a typical emotional condition for a stage-bottom, but bottom confirmation requires validation across more dimensions—including the persistence of ETF capital inflows, structural optimization in open interest (shifting from short dominance to long/short balance), and the convergence of macro risk premiums. The market has completed the first step of bottom sentiment confirmation, but it is still some distance away from having the three signals required for a trend reversal appear simultaneously.
FAQ
Q: What are the main drivers behind Bitcoin breaking above $78,000?
A: As of April 22, Bitcoin’s break above $78,000 has been mainly driven by three factors: macro sentiment support from Trump extending the Iran ceasefire agreement (contributing about a 2.7% gain on a single day); the “squeeze” effect formed as large short leveraged positions were liquidated during the price advance; and the bottom-supporting absorption power provided by spot Bitcoin ETFs recording net inflows for 5 straight days.
Q: What does the Fear and Greed Index rising from 12 to 32 mean?
A: The index rebounded by 20 points, indicating that the market has moved out of the “extreme fear” area, but it is still in the “panic” range. This typically corresponds to the first stage of sentiment repair—price rebounds driven by short covering—while the market remains significantly away from the “neutral” or “greed” zone needed for a trend reversal.
Q: What do the structural differences in long/short liquidations indicate?
A: In the 24-hour window, long/short liquidations are nearly split evenly (long $133.91 million vs short $136.09 million), but in the 4-hour window, short liquidations account for as much as 72%. This divergence suggests that the fast rebound in the short term is primarily driven by short liquidations/closing, rather than a systemic build-up of new longs, and the longer-cycle direction remains unclear.
Q: Has the current market already confirmed a bottom?
A: Extreme fear sentiment (index <15) is a common emotional condition for bottoms in historical cycles, but bottom confirmation usually requires three signals appearing at the same time: ETF capital continues to record sustained net inflows; the open-interest structure shifts from short dominance to a long/short balance; and macro risk premium converges. As of April 22, the first signal has appeared, but the other two signals still need further verification.
Q: Does Ethereum’s rebound have an independent logic this time?
A: Ethereum has risen from $2,164 to above $2,400. Over the same period, the ETH/BTC ratio has stayed around 0.0309, indicating that this rebound is highly synchronized with Bitcoin and has not shown any structural advantage independent of Bitcoin. Ethereum spot ETFs recording net inflows for 9 consecutive days provide support from the capital side, but network activity (Gas fees at an 18-month low) is still in a contraction phase.
