The key cryptocurrency ended the week with a powerful surge, breaking through the $64,000 mark. This momentum became a classic example of a short squeeze: the sharp upward move forced short position holders to close out, which only added fuel to the upward trend.
On Friday, July 5, Bitcoin reached a local high around $63,900, according to CoinGecko data. This jump was a logical continuation of the recovery from the recent drop to $58,293 recorded on July 1. However, the main catalyst for the shift in sentiment was not a technical factor but a fundamental one—the weak U.S. labor market report.
The U.S. economy created only 57,000 new jobs in June, significantly worse than analyst forecasts. This statistic sharply reduced the likelihood of a near-term tightening of monetary policy by the Federal Reserve. The market instantly reassessed expectations, leading to a drop in U.S. Treasury bond yields and a weakening of the U.S. dollar. For Bitcoin, which is often viewed as a hedge against inflation and fiat currency devaluation, such a macroeconomic picture became a powerful positive signal.
Liquidations Worth Hundreds of Millions
The result was immediate. When the price broke through the $62,000 level, a chain reaction began in the derivatives market. Over the course of a day, traders lost more than $450 million on short positions. The forced closure of these trades (short squeeze) triggered further growth, forcing the next wave of short sellers to close out.
Altcoins also followed suit: Ether gained about 4% in a day and nearly 10% over the week, while Solana posted the best result among major tokens, rising by 19%. The institutional sector is also showing signs of revival: spot Bitcoin ETFs, which experienced their worst month since launch with outflows of $4.5 billion, finally recorded a net inflow of funds.
Comment from Cryptalist analyst: Short squeezes are a powerful but short-term driver. They rarely create sustainable organic demand. The market is now entering the third quarter under conditions of reduced liquidity, which could amplify volatility in either direction. The key question is whether the current momentum can evolve into a full-fledged upward trend or if it is merely a temporary correction before a new decline. I lean toward cautious optimism: the macroeconomic backdrop is becoming more favorable for risk assets.