🔥 Crypto Rebounds—but Fear Still Rules: Bitcoin Reclaims $78K as Traders Brace for a $70K Test

The crypto market finally caught its breath on Tuesday morning (UTC), staging a broad-based rebound after days of relentless selling. Total market capitalization climbed 2.5% to $2.72 trillion, and 95 of the top 100 cryptocurrencies turned green, offering a momentary sense of relief to investors rattled by extreme volatility.

But beneath the surface, confidence remains fragile.

As Bitunix analysts put it bluntly: “Markets have clearly shifted into a phase where risk-off sentiment and deleveraging are occurring simultaneously.” In other words, this bounce may be more of a pause than a turning point.

Bitcoin led the recovery, rising 2.8% to $78,533, while Ethereum outperformed with a 4.3% jump to $2,318. Every coin in the top 10 by market cap posted gains, signaling a coordinated relief rally rather than isolated strength.

Top 10 snapshot (24h):

Beyond the majors, the action intensified. Hyperliquid (HYPE) exploded 22.6% to $37, with Kinetiq Staked HYPE (KHYPE) close behind at +22.4%. On the flip side, privacy coins stood out for the wrong reasons: Monero (XMR) fell 5.6% and Zcash (ZEC) dropped 4.7%, making them the day’s rare underperformers.

Total crypto trading volume hovered around $160 billion, reflecting renewed—but cautious—participation.

Despite the green candles, market psychology remains deeply defensive. The Crypto Fear & Greed Index slipped further into “Extreme Fear,” falling to 17, down from 26 just days ago.

This disconnect—prices rising while fear deepens—highlights a market driven more by short-covering and positioning than genuine risk appetite.

Nick Forster, founder of on-chain options platform Derive.xyz, didn’t mince words, calling the recent move “a bloodbath across crypto markets.” According to him, the selloff has been fueled by thin liquidity, profit-taking, and large-scale liquidations, pushing Bitcoin volatility up more than 50% in just days.

Options data reinforces the anxiety:

In short: the market is bouncing, but it’s still wearing a helmet.

Crypto’s weakness isn’t happening in isolation. Broader macro concerns are piling on pressure.

The January 2026 US Nonfarm Payrolls report, scheduled for this Friday, has been delayed due to a partial government shutdown, adding another layer of uncertainty. At the same time, signs of manufacturing weakness and fears of an overheated tech sector—highlighted by Microsoft’s sharp 10% drop last week—are weighing on all high-beta assets.

Forster notes that while short-term volatility has exploded, longer-dated volatility remains relatively anchored. This suggests markets expect today’s chaos to fade over a 60+ day horizon, rather than evolve into a long-term structural crisis.

Bitcoin is currently stuck in a tight battlefield.

Bitunix analysts stress that “whether BTC can hold this range will determine if the market continues with a passive adjustment or begins to show real resilience.”

Ethereum faces its own crossroads. After falling 21% over the past week, ETH is flirting dangerously close to the $2,000 psychological level. Holding above $2,350 could spark a rebound toward $2,530–$2,750, but another wave of selling may push it lower.

Institutional flows paint a mixed picture.

The divergence suggests institutions are still far more comfortable buying Bitcoin dips than betting aggressively on ETH—for now.

While prices swing wildly, structural developments continue in the background.

In Washington, US crypto market structure legislation failed to pass the Senate, with disagreements centered on whether exchanges should be allowed to offer yield or rewards on stablecoins. According to sources, the White House is pushing for a compromise by the end of the month, keeping the issue firmly on the agenda.

Meanwhile, adoption in Europe took a step forward. ING Deutschland opened retail access to crypto-linked ETNs, allowing customers to gain exposure to Bitcoin, Ethereum, and Solana through physically backed products from providers like 21Shares, Bitwise, and VanEck.

Yes, crypto is up today. Screens are green, ETFs are flowing back into Bitcoin, and nearly the entire market is breathing easier—at least for a moment.

But fear remains extreme, macro risks are unresolved, and traders are openly bracing for a $70,000 Bitcoin scenario. This rally may be real, but it’s happening in a market that’s still nervous, hedged, and quick to hit the sell button.

In this environment, every bounce is being watched closely—not as a victory lap, but as a test.