BlockBeats News, May 25th. As the market speculated on a de-escalation of US-Iran tensions, Bitcoin rebounded from around $75,000. Traders began anticipating a push towards $80,000 and triggering a significant number of short liquidations.

Several traders expressed that Bitcoin's previous drop below $75,000 seemed more like a "liquidity sweep," and the current market has returned to a short-term bullish sentiment. Analysis indicated that the $80,000 to $80,500 range was home to a significant amount of high-leverage short positions, and if the price continues to rise, it could spark a new round of short squeezes.

Meanwhile, market expectations for a peaceful agreement between the US and Iran are rising. US stock futures have already hit record highs, while oil prices have seen a decline. Analysts believe that a reduction in geopolitical risk would benefit overall risk assets' recovery, including the crypto market.

However, on-chain and funding data still raise warning signals. On-chain analysis platform CryptoQuant pointed out that over the past 10 days, there has been a significant increase in Bitcoin net inflows to Binance. The exchange's reserves have increased by around 16,000 BTC in a month, usually seen as a signal of potential selling pressure escalation.

In addition, the US physically-settled Bitcoin ETF has recently seen continued outflows, the Coinbase premium index has turned negative, indicating weakening US institutional demand. Meanwhile, market leverage on the long side continues to rise, with funding rates remaining positive.

Analysts warned that against the backdrop of "ETF outflows, weak spot demand, and crowded leveraged longs," Bitcoin currently appears more like a leverage-driven fragile rebound than a healthy bull market, potentially leading to a "large-scale liquidation event" in the future.