Bitcoin and the overall crypto market have made a cautious rebound after a steep sell-off in the middle of the week. The value has steadied around key technical supports. There have been large outflows in U.S. spot Bitcoin exchange-traded funds, and analysts are again debating the underlying causes of the recent volatility.
At the time of writing, Bitcoin is trading at $68,600, which is an important short-term support zone for the cryptocurrency. The BTC price increased 5.61% over the last 24 hours.
Other cryptocurrencies such as Ethereum, XRP, Solana, and Chainlink have also recorded an increase in price, as data from CoinMarketCap shows. This indicates that the overall sentiment in the digital asset space is improving.
The rebound also came as part of a modest uptick in US stocks, with the S&P 500 index rising slightly at the end of the week. Market analysts report that cryptocurrencies continue to show their strong correlation with other risk assets, and an uptick in stock markets may have contributed to supporting BTC and other major cryptocurrencies.
Bitcoin Selloff Driven By IBIT Hedging
On February 7, 2026, BitMEX co-founder Arthur Hayes provided a structural reason for the previous decline, which he explained as dealer hedging related to structured financial instruments related to the SEC-regulated iShares Bitcoin Trust (IBIT) offered by BlackRock.
Hayes said that as IBIT shares fell rapidly, banks and market makers had to rebalance their exposure, leading to an acceleration in selling in the BTC and derivatives markets.
He also explained that mechanical hedging can result in price magnification, especially if the market is fragile. Hayes is developing a larger bank-issued structured note product to help assess various scenarios that may cause a sharp move up or down, emphasizing that this is not related to sentiment-driven trading.
Also Read | Bitcoin Prints Second-Largest Capitulation Spike in 2 Years
BTC ETF Outflows Shake Markets
According to data from spot Bitcoin ETF trackers, there were around $1.2 billion outflows from U.S. spot ETFs over the last three trading days, with BlackRock’s IBIT experiencing the largest outflows.
At the same time, IBIT had around $10 billion in trading volumes as its price dropped by 13% in a single day, which is one of its largest price drops since its launch.
Market watchers see this surge of activity as hedging and repositioning, rather than new buying into these markets. This shows how ETF flows are increasingly impacting BTC’s near-term price movements and market liquidity. This article is informational only and should not be considered financial advice.
Also Read | IBIT Crashes 48% as Bitcoin Bloodbath Deepens
