Bitcoin to target $65,600? Fed to determine its July fate

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Bitcoin (BTC) has laid the groundwork for a rebound, recovering above the $64,000 mark after a sharp drop in June. However, this surge was driven by a short squeeze of over $450 million (buying pressure resulting from the liquidation or covering of short positions) and Bitcoin spot ETF funds that turned into net inflows in just two days. Therefore, analyses suggest that the future trend reversal depends on institutional fund inflows and the policy direction of the US Federal Reserve (Fed).

According to the investment media TradingNews on July 7 (local time), Bitcoin was trading around $64,033, up 0.76% in 24 hours and 6.27% in the past 7 days. Intraday prices fluctuated between $63,694 and $64,476, and the media assessed that the price staying at the upper end of the daily trading range was a short-term sign of dominant buying pressure. However, it noted that Bitcoin is still trading approximately 49% below its all-time high of $126,000 recorded in October 2025.

A massive short squeeze was identified as the key reason behind this rebound. As the price broke above $62,000, over $450 million in short positions were forcibly liquidated, accelerating the upward trend due to automatic buying. The volume of short position liquidations, at $86.6 million, exceeded long position liquidations of $54.01 million, and trading volume surged by 104.7% compared to the average. The media analyzed that since this rebound was largely influenced by mechanical buying due to forced liquidations rather than new buying, the continuation of spot buying will be a key variable for sustained growth.

Institutional fund flows also showed signs of reversal. Bitcoin spot ETFs recorded a net inflow of $221.72 million on July 2, ending a 10-consecutive-trading-day net outflow trend totaling $2.7 billion. Subsequent additional net inflows of $46.6 million followed. The media noted that while Bitcoin spot ETFs saw total outflows of $4.5 billion in June, marking the worst monthly performance on record, the recent shift to net inflows could signal a stabilization in institutional investor sentiment. However, it added that it is difficult to conclude a trend reversal based on just one day or short-term fund inflows.

Market sentiment remains cautious. The Crypto Fear & Greed Index stayed in the 'Extreme Fear' zone at 23, but the media explained that historically, such extreme fear phases often coincide with major bottom formations. Simultaneously, whale investors accumulated over 270,000 BTC in the past two weeks, and more Bitcoin was observed moving off exchanges. Furthermore, open interest remained at $47.71 billion, and funding rates at 0.0087%, indicating that the market is gradually stabilizing without excessive leverage.

The media presented $63,000 as a short-term support level and $64,500 as a key resistance level. If $64,500 is breached, further upside potential towards the 50-month exponential moving average of around $65,631 could open up. Conversely, if it falls below $63,000, there is a higher probability of testing support levels at $62,000, $59,000, and then $58,115. The Federal Reserve meeting scheduled for the end of this month was identified as the most crucial variable determining Bitcoin's next direction, and if ETF fund inflows continue and monetary policy eases, there is room for recovery to the $65,600-$70,000 range.

*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.*