The start of the week was marked by an impressive rally of Bitcoin (BTC). The cryptocurrency made a sharp surge, reaching a local high of $63,900 according to CoinGecko, and closely approached the psychologically important level of $64,000. This momentum was the result of a perfect storm that led to the forced liquidation of short positions worth hundreds of millions of dollars.
The market completed a phase of sharp recovery after the recent drop to $58,293, recorded on July 1. The key catalyst for the shift in sentiment was macroeconomic data from the United States. The non-farm payrolls report published on Thursday turned out to be significantly weaker than forecasts: the economy created only 57,000 new jobs. This result sharply reduced market expectations regarding further tightening of Federal Reserve policy, which triggered the reversal.
Alongside this, we observed a synchronous decline in U.S. Treasury bond yields and a weakening of the U.S. dollar. These factors created a favorable environment for risky assets, sharply reducing the opportunity cost of holding Bitcoin and accelerating the exit from the bearish trend that dominated June.
Institutional Factor and Wave of Liquidations
The spot Bitcoin ETF sector also played an important role in supporting the market. After a prolonged period of capital outflows, investment funds finally recorded a net inflow of funds. Institutional platforms continue to digest the record June losses, which totaled $4.5 billion, and this reversal signals a return of risk appetite among major players.
The result was immediate: traders lost over $450 million on short positions in the derivatives segment when Bitcoin broke through the $62,000 level. The dynamics became a classic example of a short squeeze—the forced closure of short positions fueled the rise, causing a cascade of liquidations among the next wave of short sellers.
Altcoins and Prospects
Ether (ETH) rose by about 4% over the day and nearly 10% over the week, while Solana (SOL) showed the best performance among major tokens, gaining around 19%. However, despite the positivity, institutional flows have not yet confirmed the sustainability of the movement: ETF funds are still recovering from their worst month since launch.
The question remains whether the current short squeeze can evolve into a full-fledged long-term trend. The forced closure of margin positions often causes sharp price fluctuations but rarely generates stable organic demand. Additionally, the market enters the third quarter under conditions of reduced liquidity, which could amplify volatility in either direction.
Expert Comment: The current growth is primarily a technical bounce against the backdrop of shifting macroeconomic expectations, not a fundamental shift. The key test for bulls will be holding the $64,000 level and forming sustainable demand from real buyers, not just liquidated short sellers. Until then, I maintain cautious optimism with an adjustment for high market uncertainty.