💡 After experiencing a continuous extreme washout over several days, the balance of long and short positions in the cryptocurrency market has welcomed a violent breaking of the situation under the dual resonance of macro and funding aspects!
Technically, the short selling power of Bitcoin on the 4-hour level has shown a very obvious exhaustion trend, and the bullish rebound momentum is accelerating.
Even more convincing is the ironclad reversal on the funding level: On July 2, the U.S. spot $BTC ETF strongly ended the previous 10-day streak of net outflows, with a staggering net inflow of $223.5 million on a single day! This strong shot in the arm was directly catalyzed by macro indicators—June's non-farm payroll data (NFP) recorded only +57,000 (far below the expected +110,000), the weak employment data instantly ignited expectations of interest rate cuts by the Federal Reserve.
The short-term shift of institutional funds and the complete exhaustion of short selling power clearly signal that a round of "corrective rebound" driven by macro and institutional factors has officially begun.
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🧱 I. Technical stabilization of the market: 4-hour short selling exhaustion, Fibonacci counterattack target points revealed
Combining the latest on-chain data and the flow of large orders, blindly chasing shorts is likely to encounter a bullish short squeeze-style rebound at this moment. The current technical analysis presents two highly probable corrective levels:
[First Target: Fibonacci 0.618 retracement near $63,500 (high probability)]: With the severe contraction of the short selling power on the 4-hour level, the foundation for price stabilization and recovery has been solidified. Bulls will consolidate briefly to build momentum, and the price is very likely to directly test and reclaim the core defensive line of 0.618.
[Second Target: Fibonacci 0.786 retracement near $65,000 (significant reply)]: If the bullish volume further expands and stabilizes above $63,500, the probability that the price will further reach the $65,000 threshold under the continued influx of institutional funds should not be underestimated.
[Ultimate suspense: Second top retest below $68,000]: As for whether this round of rebound can sprint to below $68,000 for a second top retest, it is necessary to closely monitor the subsequent strength and weakness of long and short positions, real-time data, and the intensity of support from Wall Street funds.
🧱 II. Dissection of Wall Street's trump card: rate cut expectations trigger massive capital inflow, divergent institutional attitudes
The ETF fund flows on July 2 are the most critical indicators for judging the current cold-blooded temperature of the market:
[End of consecutive outflows, collective counterattack by bulls]: Compared to the panic selling of $296 million in Bitcoin on July 1, the net inflow of $223.5 million on July 2 marks a comprehensive shift to bullishness among institutional funds. Among these, Fidelity (FBTC) topped with a gain of +$166 million, followed by Ark (ARKB) contributing +$91.8 million. Although BlackRock (IBIT) showed a slight outflow of -$40.4 million, the overall net inflow still dominated the market.
[All sectors turned positive, high Beta assets are stirring]: Not only did $ETH spot ETF also turn positive with +$29 million (strongly supported by ETHA's +$29.7 million), but even Solana ETF (+$2.2 million) and Hyperliquid ETF (+$2.2 million) also showed slight exploratory inflows. This indicates that some sharp and aggressive funds have begun to rotate and layout towards high-growth narratives.
🛠️ III. Outlook for July trends: from cycle-driven to macro-driven, oscillating to build a bullish bottom
Since 2026, ETFs have become the dominant factor in the supply-demand relationship of Bitcoin, far surpassing traditional variables such as miner selling pressure:
Short term (next 1-4 weeks): If the inflow trend can be sustained (maintaining above $100-200 million per day), the market is expected to enter a high-frequency "repair-rebound" phase. If rate cut expectations are further strengthened, this will directly push Bitcoin to challenge recent highs.
Mid term (next 1-3 months): The baseline scenario is oscillating with a bullish bias. Continued institutional inflows + marginal improvement in the macro environment will support prices in building a bottom within the current range. However, if macro data fluctuates repeatedly (such as inflation or employment stronger than expected), expectations for rate cuts may quickly cool, and attention should be paid to the risk of a return to outflow.
📋 IV. Core action checklist for traders
Risk control radar tracking: Closely monitor daily ETF flows. If daily outflows fall below $200 million again, or if IBIT shows abnormal continued outflows, be cautious of a wave of leveraged liquidations triggered by a reversal of rate cut expectations.
Positioning for waves: Follow the technical exhaustion of shorts on the 4-hour level and use a strategy of placing orders in batches to ambush bullish opportunities for a corrective rebound, with primary profit targets focused on the critical Fibonacci nodes of $63,500 and $65,000.
Asset rotation defense: Against the backdrop of Ethereum ETF turning positive and small inflows into ALT ETFs, assess the opportunity for ETH/BTC exchange rate stabilization and recovery, and pay attention to whether high Beta assets demonstrate short-term reversals accompanied by increased inflows.
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⚠️ Disclaimer: The above content is for reference only and does not constitute any investment advice. Investing belongs to non-principal-protected structured financial products, and in the face of severe volatility in the cryptocurrency market and de-leveraging adjustment periods, there may be risks of capital being converted into another asset due to significant deviations from the pegged price of the underlying asset.
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