Bitcoin (BTC) Rebounds Through MicroStrategy (MSTR) Sell-Off Fear... Are the Bulls Back?

▲ Bitcoin (BTC), Bull Market (Bull) vs Bear Market (Bear)/ChatGPT generated image

Bitcoin, which had fallen to $61,300 due to the selling shock from MicroStrategy (Strategy, MSTR) Bitcoin (BTC), quickly rebounded. However, the derivatives market is not yet confident about a sustained uptrend.

According to Cointelegraph, a cryptocurrency specialized media outlet, on July 7 (local time), Bitcoin quickly recovered its losses after falling to $61,300 immediately following MicroStrategy's announcement of Bitcoin sales. As MicroStrategy secured an additional $216 million in cash, concerns surrounding its ability to pay dividends and service debt were also alleviated.

The annualized funding rate for Bitcoin perpetual futures surged to 9% on Monday. This level indicates a balance between bullish and bearish leverage demand, moving away from the bearish trend seen on Saturday when negative funding rates were recorded. Conversely, on Deribit, put option premiums surpassed call options, with the put-call premium ratio reaching 1.15, indicating limited bullish conviction in the derivatives market despite the rebound to $63,500.

US-listed Bitcoin spot ETFs saw a net inflow of $223 million on Friday. This marks the first net inflow after 10 consecutive trading days of outflows. As a record $4.51 billion in net outflows in June had weighed down investor sentiment, Bitcoin spot ETF fund flows have emerged as a key market variable.

MicroStrategy currently holds cash reserves sufficient to pay 17 months' worth of dividends. Although its debt leverage is only 8%, it holds $8 billion in unrealized losses from its Bitcoin purchases. On-chain indicators showed signs of selling exhaustion and a strengthening $60,000 support level, as the volume of Bitcoin transferred to exchanges by long-term holders decreased from an average of 8,040 BTC per day to 4,130 BTC in one week.

Cointelegraph analyzed that derivatives investors might remain cautious unless sustained net inflows are confirmed in Bitcoin spot ETFs. MicroStrategy's substantial unrealized losses and the defensive positions in the options market also support a cautious outlook regarding a bullish reversal for Bitcoin.

[Article Key Summary]

-Bitcoin quickly rebounded after falling to $61,300 due to MicroStrategy's Bitcoin selling shock.

-The annualized funding rate for Bitcoin perpetual futures rose to 9%, but bullish conviction in the derivatives market remained limited.

-Bitcoin spot ETF fund flows and a decrease in selling by long-term holders have emerged as key market variables.

*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.*