Why Bitcoin Rebounded?…Middle East Concerns Ease, Short Squeeze Pushes it to Retest $64,000

▲ Bitcoin (BTC) ©Dasol Ko

Bitcoin (BTC) rebounded by over 2% thanks to easing geopolitical concerns in the Middle East and a short squeeze (buying pressure that occurs to liquidate or cover short-selling positions), drawing market attention to the possibility of breaking through the $64,800 resistance level.

According to cryptocurrency market data aggregator CoinMarketCap on July 10 (local time), Bitcoin recorded a 2.35% increase over the past 24 hours, reaching $63,938.15. During the same period, the total cryptocurrency market capitalization also increased by 1.97%, showing a similar trend to Bitcoin. The media analyzed that this surge was largely influenced by a general market rebound driven by easing tensions in the Middle East and improved investor sentiment, rather than specific positive news. Bitcoin moved in line with macroeconomic trends, showing a high correlation of 63% with the Standard & Poor's (S&P) 500 index.

The derivatives market also contributed to the upward trend. In the past 24 hours, a total of $89 million worth of positions were liquidated in the Bitcoin market, with short position liquidations amounting to $82.3 million, a sharp increase of 239% compared to the previous day. The media explained that the short squeeze played a role in amplifying the price increase. Technically, Bitcoin is also maintaining its short-term upward structure by staying above its 7-day Simple Moving Average (SMA) of $63,131.93.

Analysis suggests that the short-term outlook depends on whether the $62,500 support level is maintained. If Bitcoin holds this price, there's a high possibility of retesting the recent high of $64,800, but conversely, if $62,500 breaks, a correction could extend to the next support level of $61,300. Additionally, the current funding rate remains positive at 0.0046%, indicating a gradual increase in bullish bets, which is presented as a variable to watch.

Institutional fund flows are also a key factor in determining future direction. The media mentioned a net outflow of $84.9 million from US spot Bitcoin ETFs on July 8, analyzing that if ETF fund flows turn back into net inflows, it could boost Bitcoin's upward momentum. Furthermore, the direction of the US cryptocurrency market structure bill, the CLARITY Act, was also cited as a major market catalyst.

Ultimately, Bitcoin is currently maintaining a cautious upward trend, driven by an improved macroeconomic environment and a short squeeze, but it still lacks strong, standalone upward catalysts. The media diagnosed that maintaining the $62,500 support level and the recovery of inflows into US spot Bitcoin ETFs are key variables that will determine the next upward phase.

*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.*