Bitcoin's weekend rally pushed the leading cryptocurrency to a two-week high above $63,000, but the question now is whether it can sustain that momentum. After briefly touching nearly $63,900 during the US holiday weekend, BTC retreated toward $63,200 on Monday, still holding onto weekly gains of more than 5%.
What Drove the Rally?
The advance was fueled by a combination of weaker-than-expected US economic data, renewed demand through spot Bitcoin ETFs, and a wave of short liquidations. The US Bureau of Labor Statistics reported only 57,000 jobs added in June, well below the 110,000 forecast, prompting traders to dial back expectations of further Federal Reserve tightening. That reduced pressure on Treasury yields and lowered the opportunity cost of holding assets like Bitcoin.
According to CME Group's FedWatch Tool, markets now assign nearly an 80% probability that the Fed will leave rates unchanged at its July meeting. However, QCP Capital noted that softer inflation data is still needed before markets can fully price in a more accommodative policy outlook.
Short Squeeze Amplifies Gains
The macro backdrop coincided with a heavily short-positioned derivatives market after Bitcoin spent much of June trading near the $58,000-$60,000 range. Once the price reclaimed the psychologically important $62,000 level, short sellers were forced to close positions, triggering a rapid squeeze. Market commentator Daan Crypto Trades described the move as a classic short squeeze, noting that prices climbed into a heavily shorted zone before forced covering intensified the rally.
CoinGlass data showed around $167 million worth of crypto positions were liquidated over the past 24 hours, while broader weekend liquidations exceeded $450 million, providing additional buying pressure during relatively thin holiday trading conditions.
Institutional Flows Improve but Caution Remains
Institutional flows also improved, with QCP Capital reporting that US spot Bitcoin ETFs attracted $224 million of net inflows on Thursday, ending a six-session streak of outflows after roughly $2.4 billion had previously left the products. Despite this, Wall Street firms remain cautious. Citigroup recently downgraded its 12-month Bitcoin price target to $82,000 from $112,000, slashing its net ETF inflow forecasts to zero and warning of a structural breakdown in spot demand. June saw a record $4.5 billion pulled from the funds.
Liquidity is actively rotating out of digital assets and into high-performing AI-related tech equities, leaving Bitcoin vulnerable to quick reversals without deep spot market liquidity. Regulatory friction is also adding to the overall weakness, as major global exchanges have begun halting certain unapproved services for EU residents following the July 1 Markets in Crypto-Assets (MiCA) deadline.
Technical Resistance Levels
From a technical perspective, Bitcoin has regained important short-term support but still faces several resistance levels. The daily chart shows BTC recovering from lows near $57,700 to reclaim the 20-day exponential moving average (EMA) around $62,400, while the daily Relative Strength Index (RSI) has climbed back to roughly 50, indicating improved momentum without entering overbought territory.
Bitcoin remains below the 50-day EMA near $65,700, the 100-day EMA around $69,400, and the 200-day EMA near $75,500, leaving the broader daily trend tilted to the downside until those levels are reclaimed. The 0.618 Fibonacci retracement around $63,600 is the first hurdle; a sustained move above that could open the way toward $65,200 and then the previous swing high around $67,300. Beyond that, the next major resistance zone sits between $69,000 and $75,000.
Volume Profile analysis points to significant historical trading activity in the mid-$60,000 region, suggesting additional selling pressure if buyers fail to absorb supply there. Failure to hold above the current support zone around $62,600-$63,000 could expose the market to another test of $60,000, with the recent lows near $57,700-$58,000 remaining the next major downside support.
Derivatives Positioning
Derivatives positioning currently offers little evidence of excessive leverage building behind the latest recovery. Bitcoin's open interest stood at approximately $21 billion, up just 0.18% over the past 24 hours, while perpetual contracts accounted for about $20 billion of that total. The long-to-short ratio has held close to 1.03 across intraday timeframes, with long positions representing roughly 50.6% of open positions and shorts accounting for about 49.3%. This near-even split indicates traders have yet to establish a strong directional consensus after the recent rebound.
For broader market context, see our analysis on Silver Breaks Above $62 as Weak US Jobs Data Dents Dollar, Fed Hike Odds and XRP Open Interest Surges to $2.89B as Traders Position for Rally Above $1.38.
This article is for informational purposes only and does not constitute financial advice.
