Bitcoin (BTC), $100 Million Short Position Liquidated...Bear Market to End in 14 Weeks?

▲ USD, Bitcoin (BTC)/AI Generated Image

Bitcoin (BTC) is fueling expectations of a rebound, triggered by its recovery to $60,000 and the liquidation of $100 million in short positions. However, with the risk of falling below $58,000 and the resistance level at $64,000, the cryptocurrency market entered a directional crossroads in July.

Altcoin Daily, a YouTube channel specializing in cryptocurrencies, stated in a video uploaded on July 1st (local time) that Bitcoin recorded its lowest monthly closing price since September 2024, but rebounded above $60,000 on the first day of July, liquidating $100 million in short positions within four hours. The video presented the fact that this rebound was not merely a short squeeze but also supported by spot demand as a bullish indicator.

However, short-term charts still remain in bearish territory. Altcoin Daily pointed out that Bitcoin is below key moving averages, and if it falls below $58,000, the next downside target would be $55,000. It explained that a recovery to $62,500 is necessary for a short-term bullish reversal, and subsequently, breaking through the 200-day moving average at $62,400 and the $64,000 resistance level would be crucial.

The video also identified changes in the US regulatory environment as a major variable for the July market. Paul Atkins, a commissioner of the U.S. Securities and Exchange Commission, mentioned the goal of making the U.S. a global cryptocurrency hub and stated that innovative companies that have moved overseas would be brought back under U.S. law. Hester Peirce, also a commissioner of the U.S. Securities and Exchange Commission, said she “remains optimistic” that the US crypto market structure bill will pass this summer.

In terms of on-chain structure, a potential cost basis collision, which could occur in about 14 weeks, drew attention. Altcoin Daily explained that the long-term holder cost basis is rising from around $49,000, while the short-term holder cost basis is falling from around $69,000. If the current pace continues, the two cost bases will converge in approximately 14 weeks, and the video analyzed that this structure has been linked to the final phase of past Bitcoin bear markets.

Political and macroeconomic variables were also mentioned. The video claimed that former US President Donald Trump earned $1.1 billion from cryptocurrencies and holds over $100 million in Bitcoin and $55 million worth of Ethereum (ETH). Kevin Warsh, a former Federal Reserve governor, did not give a clear signal on the direction of interest rates in July, but the fact that inflation remains high and the Fed emphasized its commitment to the 2% inflation target was also presented as a key variable for market interpretation.

[Key Article Summary]

-Altcoin Daily stated that Bitcoin recovered to $60,000, liquidating $100 million in short positions within four hours.

-Bitcoin faces a risk of falling to $55,000 if it drops below $58,000, and the recovery to $62,500 and $64,000 was presented as a variable that will determine the short-term direction.

-The US crypto market structure bill, the collision of long-term and short-term holder cost bases, Trump's crypto holdings, and Warsh's inflation remarks were highlighted as key market variables for July.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*