Autor Cointelegraph

Bitcoin (BTC) trades slightly above $62,000 and is down nearly 2% over the past 24 hours amid a risk-off mood across global markets. The pressure is not coming from crypto exclusively and is more so attributed to a sharp selloff in semiconductor and AI stocks. Renewed profit-taking from Samsung sent Asian markets reeling overnight, and military escalation between the US and Iran sent oil up around 5%. As a result, US stocks opened lower, and on Wednesday the Federal Reserve released the minutes from its June meeting, a report traders typically watch closely for clues on the timing of any rate cut. Currently, markets price roughly a 73% chance the Fed holds rates steady at its next meeting on July 29, but the major takeaway for investors will be how the tone of the minutes frames the Fed’s view on inflation and interest rates.  Bitcoin buyers quickly became sellers Bitcoin’s cumulative volume delta (CVD) showed traders buying on Monday, with futures CVD adding about $585 million and spot CVD adding nearly $119 million, for a combined $705 million in net buying as BTC rallied above $64,000. By Wednesday, the mood had shifted to reflect traders’ apprehension and the need to cut risk ahead of oil’s advance, the semiconductor selloff and the pending release of the Fed minutes. Futures market selling accelerated to nearly $500 million and spot followed with a $86 million sell volume. BTC/USD spot and futures CVD. Source: HyblockBitcoin’s funding rate and open interest dropped, reflecting traders’ choice to cut positioning, but the week-long trend of positive funding rates remains intact. BTC/USD funding rate, open interest. Source: HyblockLiquidations have also stayed relatively small in dollar terms, but they are one-sided. Wednesday’s forced selling was almost entirely on the long side, with roughly $47 million in long liquidations versus about $4 million in short liquidations. Hyblock’s liquidation data shows a large cluster of long positions near $61,000 and if Bitcoin trades down into that zone, those forced sales can briefly accelerate the move lower. A trend reversal is not confirmed Although Bitcoin bulls put in a good effort, absorbing dips to $60,000 and below, and fresh flows from spot markets and BTC ETF buying show investor appetite in the current range, the bulk of the price move remains driven by futures activity. Wednesday’s price action demonstrates how fast conviction and price can unravel when the primary fuel behind the move is futures-driven, and sentiment across the crypto market remains in the “fear” category according to the Crypto Fear & Greed index.Crypto Fear & Greed Index. Source: Alternative.meBeyond the geopolitical and Fed-related impact on intra-day price action, Strategy’s recent sale of 3,588 BTC and the fact that Bitcoin’s current price is below its $74,582 average price have cast an ominous cloud over the wider market as investors grapple with the reality that the largest BTC treasury could become a frequent seller. 

Bitcoin (BTC) fell from nearly $64,000 on Sunday to about $62,000 on Monday, and the primary trigger behind the move appeared to be a SEC disclosure showing Strategy’s largest ever sale of 3,588 BTC. The fuller explanation for the price action can be found deeper in the plumbing.Sunday’s climb toward $64,000 was almost entirely futures driven. Net futures buying reached roughly $415 million for the day, capped by a single four-hour burst of about $687 million that force-closed some $33 million in bets against Bitcoin. Spot flows over the same session were slightly negative, and this gap matters since a rally with no cash buyers behind it rests on positions that can be forced to unwind at any moment.Monday morning delivered the unwind, and it accelerated as Strategy’s filing landed. The largest corporate Bitcoin treasury holder sold BTC for $216 million to fund dividend payments, with a further $1.25 billion of sale capacity still untouched. Related: Bitcoin recovers from Strategy’s BTC sale, funding rates hit 9%: Are bulls back?Following the news, Bitcoin futures flows swung to roughly $456 million of net selling in a single four-hour window. Liquidations hit both directions at once, roughly $42 million of bullish positions and $49 million of bearish ones. The Monday afternoon recovery looked different from Sunday’s rally as futures buying of about $568 million was joined, for the first time in days, by meaningful spot buying of about $143 million.BTC/USD cumulative volume delta. Source: HyblockThrough the price whipsaws, Bitcoin’s funding rate held firm in positive territory for over a week, including during Monday’s slide. With about $20.6 billion in open futures positions, the market’s leveraged optimism remains largely intact, but due to the funding rate and number of longs crowded into leveraged positions, the current setup is fragile.BTC/USD open interest. Source: HyblockTwo areas to keep an eye on are whether Strategy’s sale marks the beginning of a prolonged selling phase for the company and whether the unused $1.25 billion authorization will weigh on any rally. On Wednesday, the Federal Reserve releases minutes from its June meeting, with markets currently pricing in a 75.6% chance that rates will remain at 3.50%-3.75% in July. Any hawkish tone in the minutes may test crowded leveraged long positions, with pressure zones at $62,300 to $62,800 above the market and $61,000 and $59,500 below.

Bitcoin (BTC) rallied, $50 short of $63,000, on July 3, and Ether (ETH) outperformed the wider market, pushing to $1,775. The end-of-week rally comes a few days after BTC fell to a 21-month low and ETH sank to fresh year-to-date lows. Highlighting the negative sentiment, the Crypto Fear & Greed index registered “Extreme Fear” at 11 out of 100. Crypto Fear & Greed Index. Source: Alternative.meThat gap between the “Extreme Fear” reading and Friday’s bullish market activity is worth noting. On July 2, US spot Bitcoin exchange-traded funds (ETFs) took in a net $221.7 million, their largest single-day inflow since early May and a break from 10 consecutive days of outflows. Spot Bitcoin ETF netflows. Source: SoSoValue.comFutures markets fuel Bitcoin and Ether gainsThe leverage side of the crypto market looks more one-sided than the spot buying data alone would suggest. “Funding,” the periodic payment traders holding bets on higher prices make to traders betting on lower prices when the market leans bullish, has stayed positive for the past eight days and has been climbing throughout this period. Bitcoin open interest, funding rate. Source: HyblockThe total amount of outstanding leveraged Bitcoin positions is also near its highest level in the past several days, even though the price has mostly moved sideways. Leverage building up without price making much progress is generally viewed as a caution sign rather than confirmation that a rally is underway. Related: Bitcoin holds $61K after US jobs data report, AI sector weakness: Did BTC bottom?Can bulls keep their pace? Looking at the next few trading sessions, a few reference points stand out. On the cautious side, whether Bitcoin holds above roughly $61,000, where a large cluster of leveraged buy positions sits, matters, and so does whether Wednesday’s ETF inflow turns out to be a one-day event or the start of a new trend. On the more encouraging side, a move back above $62,500 would put Bitcoin within reach of price levels where leveraged short positions become more exposed, and continued positive buying activity alongside a still-growing pool of leveraged positions would extend the pattern seen over the past few days. Bitcoin liquidation heatmap. One-month view. Source: HyblockThe overall market read is mixed rather than clearly bullish or bearish. Spot buying and a rebound in ETF flows suggest sentiment may be improving faster than the fear-and-greed number implies, but a market this deeply fearful and this leveraged toward higher prices tends to be more fragile. The upcoming US holiday-weekend stretch of typically thinner trading adds another layer of uncertainty to the current setup.