On Friday, the 3rd of July, Bitcoin [BTC] managed to challenge the $63K-level but was unable to surpass it. The bounce from $58.5K at the start of the month appeared set to continue.
According to AMBCrypto, overleveraged short positions were caught off-guard by this move. For Bitcoin alone, $143 million in short liquidations have been recorded so far this month.
The heavy spot ETF outflows indicated that most weak hands may have left the market, and the recent move may be a bullish reversal rather than just a short squeeze.
Overhead BTC supply caps any recovery effort
The 4-hour chart revealed a bearish price structure for BTC at press time.
A bounce to $65.2K may be possible though, according to the Fibonacci retracement levels.
Zooming out, the Cost Basis Distribution chart highlighted the $64K and $67K levels as the immediate clusters where a sizeable amount of BTC was acquired. The $72.3K and $77.2K-levels also had significant supply.
This suggested that in the scenario of a significant bounce, underwater holders who acquired Bitcoin at these price levels can look to exit the market at breakeven. Large waves of selling would impact short-term upward momentum.
Signs of major Bitcoin volatility ahead
The long-term holder MVRV compares the current market price to the aggregate cost basis of holders who have held their BTC for 155 days or more. When this long-term holder cohort’s MVRV falls below 1, it means that even these market participants, on average, may be in unprofitable positions.
Deep price corrections and LTH despair have come about in every Bitcoin cycle so far. And yet, in 2026, the LTH MVRV is yet to go below 1. It had a reading of 1.26, at the time of writing.
In a CryptoQuant Insights post, XWIN Japan drew attention to the sharp hike in BTC inflows to exchanges towards the end of June. This trend was true for Ethereum and across the altcoin sector too.
Major inflows signal capital flowing across the entire crypto sector and not just a few select assets.
Deeply negative ETF flows, falling apparent demand, and factors such as the negative Coinbase Premium Index hinted at a lack of buying pressure in the market.
If liquidity conditions are factored in too, a decisive price move could soon be arriving.
Final Summary
- Bitcoin’s price structure was bearish, and a bounce to $65K-$67K may be possible in the short-term.
- Long-term market bottoms tend to be marked by capitulation, and a decisive price move could be looming.
