Bitcoin (BTC), short sellers liquidated $100 million...bear market to end in 14 weeks?

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Bitcoin (BTC) is fueling expectations for a rebound, buoyed 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 in July has reached a directional turning point.

Cryptocurrency YouTube channel Altcoin Daily stated in a video uploaded on July 1 (local time) that although Bitcoin recorded its lowest monthly close since September 2024, it 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 is 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 breaking past the 200-day moving average at $62,400 and the $64,000 resistance level would be crucial thereafter.

The video also identified changes in the US regulatory environment as a major variable for the July market. Paul Atkins, a commissioner of the US Securities and Exchange Commission, expressed the goal of making the US a global cryptocurrency hub, stating that innovative companies that have moved overseas would be brought back under US law. Hester Peirce, another commissioner of the US Securities and Exchange Commission, also commented on the US cryptocurrency market structure bill, saying she "remains optimistic it will pass this summer."

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

Political and macroeconomic variables were also mentioned. The video claimed that US President Donald Trump has earned $1.1 billion from cryptocurrencies and holds over $100 million in Bitcoin and $55 million worth of Ethereum (ETH). Kevin Warsh, 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's emphasis on adhering to its 2% inflation target were presented as key variables 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 breaks below $58,000, with recovery to $62,500 and $64,000 presented as key variables for determining the short-term direction.

-The US cryptocurrency market structure bill, the collision of long-term and short-term holder cost bases, Trump's crypto holdings, and Warsh's inflation remarks were identified 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.*