Federal Reserve Chairman Kevin Warsh did not announce an interest rate cut. When talking about inflation, he said that inflation expectations and inflation risks have declined in the past few weeks. He also reiterated that the Fed will maintain its 2% inflation target.

The second half of the sentence is not dovish, but the market took away the first half first. Bitcoin quickly rebounded from its lows and is back near $60,000. Subsequently, U.S. employment data weakened, expectations for interest rate hikes continued to cool, and the market turned from "repair" to "relay."

In the past few weeks, what the market fears most is that the Federal Reserve continues to maintain interest rates at high levels and even raises tightening expectations again. For Bitcoin, the harder the interest rate expectations are, the narrower the valuation space for risky assets is, and the easier it is for leveraged positions to be eliminated first.

After Warsh downplayed the risk of inflation, the market first repriced "pressure to raise interest rates." This direction was given another push after weak employment data. Bitcoin moved back above $60,000 from around $57,742 in what appears to be a quick price move that is essentially the market retracing the previous round of panic trading.

On Deribit, traders concentrated on buying $50,000 put options. Gold perpetual futures open interest hit a new high. There is another technical death cross. Several signals stacked together indicate that the market is buying insurance for a decline.

This is different from a normal callback. In a normal pullback, the seller just wants to get out. In panic defense, traders will simultaneously buy puts, buy safe-haven assets, and reduce leverage. When the price reaches a critical point, liquidation will amplify the fluctuations.

CoinGlass data shows that when Bitcoin fell to around $57,700, it triggered liquidations of approximately $395 million. This figure shows that the price drop is not just driven by selling, but also by the forced exit of leveraged positions.

After being forced to exit, the market is more likely to rebound.

The reason is straightforward. The previous round of decline cleared some of the bullish leverage and pushed defensive sentiment to a high level. When the margins of macro news become looser, the price only needs to return to near the key mark to make short sellers nervous. Closing a short position is essentially a purchase. The higher the price goes, the more short positions are forced to retreat.

This is the second level of thrust. Bitcoin briefly approached $62,000 as Ethereum and Solana led gains, with about $281 million in bearish bets liquidated.

So, this rebound cannot be attributed to just one word from Wash. A more accurate way to break it down is into three sections.

In the first paragraph, inflation risks were downplayed and market concerns about the Fed's path eased. In the second period, employment data weakened and interest rate hike expectations continued to decline. In the third period, short positions were forced to cover, pushing the spot price faster.

If you only read the first paragraph, the market trend can easily be understood as "macro-positive". If you only read the third paragraph, you will mistakenly think that this is a purely technical rebound. The real structure is that both take place at the same time. The macro gives the reason for the price to rise, and the position gives the price the speed to rise.

The reaction of altcoins also shows that this is not a single-currency market.

After Bitcoin regained $60,000, Ethereum, Solana and Dogecoin rose simultaneously. Ethereum subsequently led gains among major cryptocurrencies, rising around 12% over the past week. When funds begin to spill from Bitcoin to Ethereum and Solana, the market is no longer just about "whether Bitcoin can hold up."

The CoinMarketCap Altcoin Seasonal Index rose to 52/100, its highest level in three months. This location is very subtle. It just crossed the midline, indicating that risk appetite is indeed back, but not at the stage of full altcoin euphoria.

This is also the first thing to pay attention to. The rebound in altcoin sentiment does not mean that the altcoin season has been confirmed.

A true copycat season usually requires a wider spread of capital. Now it is more like that after Bitcoin stopped falling, the market first bought back large market capitalization tokens with good liquidity. Ethereum and Solana can outperform, but some small coins are still weak. This differentiation itself is a signal.

The second thing is that the options market is not entirely convinced of the rebound.

The bearish, bullish skew in BTC and ETH still shows traders are willing to pay more for downside protection. Prices have rebounded and insurance is still not cheap. This detail is colder than the spot price.

If traders truly believe the trend has reversed, put premiums will typically fall back faster. The current situation is more like that the spot market has brought the price back first, and the derivatives market has not yet closed its umbrella.

The third thing is that the short squeeze cannot continue indefinitely.

Closing short positions will bring buying orders, but this kind of buying orders are one-time. It can push prices out of crowded lows, but it cannot support an entire trend on its own. When the liquidation is over, the market needs new spot buying to catch up.

So what we really want to see next is not whether Bitcoin has reached a certain integer threshold, but who is still buying after it reaches a certain integer threshold. Spot ETFs, stablecoin liquidity, and the follow-up strength of Ethereum and Solana will all be more informative than single-day gains.

The fourth thing is that macro variables are still the same knife.

This round of gains benefited from falling inflation risks and weaker employment. On the other hand, if subsequent data point to inflationary stickiness again, or the Fed's rhetoric becomes tougher again, the market will use the same set of logic to set prices in the opposite direction. Bitcoin is not an asset that is divorced from the macro, it just responds faster to changes in macro expectations.

The price has popped out of over-defense, but the real confirmation will have to wait until the options market is willing to remove the insurance.