Hundreds of millions of dollars' worth of shorts were liquidated as Bitcoin's price surged to over $64,000 early on Monday, reaching $63,900 and extending a weekend rise.
The rebound from July 1's low of $58,293 prompted the move, according to BeInCrypto.
This was because expectations of a near-term rate hike by the Federal Reserve were dampened by the US Nonfarm Payrolls report, which showed a gain of just 57,000 jobs in June, less than expected.
As Bitcoin's price soared over $62,000, traders saw substantial losses of more than $450 million from their short bets.
For the week, Ether rose around 10%, over the weekend and rose further on Monday by about 4%, whereas Solana rose almost 19%.
After a dramatic 10-day decline, spot Bitcoin ETF inflows have begun to rise again.
Nevertheless, the substantial withdrawals of $4.5 billion that took place in June are still being processed by the funds.
The Turnaround
As the week drew to a close, Bitcoin remained firm at its two-week highs on Sunday as traders braced for possible market swings in the coming days.
The price of Bitcoin at approximately $62,700 is where a significant long-term trend line and the 200-week simple moving average (SMA) are located, according to data from TradingView.
Over the three-day US holiday weekend, bulls were able to navigate narrower exchange order books and achieve a top of $63,450 on Saturday.
The most current evaluation of X by analyst Exitpump said, "Observing a more robust passive supply here, exerting downward pressure on price."
$BTC Seeing stronger passive supply here pressing price from above. Spot bands are red during pullback. pic.twitter.com/XquCaeQnKF
— exitpump (@exitpumpBTC) July 5, 2026
CoinGlass statistics show a total of $167 million in the cryptocurrency market for the past 24 hours. Trader Daan Crypto Trades has been highlighting short position liquidations as prices have risen.
As he noted on X, "a typical scenario" is when the price increases gradually until it draws short positions, which then causes a forced covering, which further increases the price.
$BTC Shorts taken out twice as price moved towards $63K+ on July 4th.
— Daan Crypto Trades (@DaanCrypto) July 5, 2026
Classic short squeeze, price grinds higher into a level everyone's shorting until forced covering does the rest.
Now the question is whether $62.6K (Weekly 200MA) holds as support or if this was just… pic.twitter.com/1BbwOL6yMa
ETF Green Shoots?
Traders at QCP Capital have spotted some promising trends for risk assets and cryptocurrencies in their latest research, which they published on Friday. One of these was a noticeable uptick in capital flowing into Bitcoin ETFs in the US market.
A decline in the Federal Reserve's aggressive forecast for interest rate hikes followed the last US nonfarm payrolls report's failure to meet expectations, according to Cointelegraph.
At the July 29th meeting, the Fed is expected to almost certainly keep interest rates at their present levels, according to the most recent data from CME Group's FedWatch Tool.
Before that, QCP said that positive CPI inflation data would be needed for a more thorough confirmation of a front-end dovish repricing.
Critically, the spot Bitcoin ETF trade is attempting to reestablish stability.
Investors are still showing interest in Bitcoin despite the narrative shifting to pose serious hurdles to the asset class in recent sessions, according to the most current daily data from SoSoValue.
There has been progress in that direction. Even more difficult is the fact that no amount of good fortune can reverse the effects of a string of withdrawals.
To this day, institutional demand may be best gauged by looking at US spot Bitcoin ETFs. The general environment remains sensitive following a series of withdrawals that have damaged BTC and lowered mood, although recent inflows give some support.
The current surge in activity has market players wondering whether it will last more than a single trading day.
Due to its ability to filter out most of the irrelevant information, Farside Investors' daily ETF data has become a highly esteemed dashboard in the Bitcoin industry.
There are several things that might cause prices to change. If regulated spot products are bringing in fresh capital or bringing supply back into the market, it will show in the ETF flows. Currently, that difference is crucial.
The market is still wary of institutional buyers' moves, whether they are adding to their holdings or just pausing their sell-offs, and Bitcoin, despite its recovery, is entering this market with caution.
Importance of ETF Flows vs. Headlines
Rather than focusing on the actual goods, the storyline behind ETFs has become more important. When market conditions are good, Bitcoin is steadily supported by inflows. However, they don't make volatility disappear; they do make it easier for large investors to build up assets without dealing with exchanges or custody services directly.
The weather changes drastically as soon as that station takes a negative posture. The reliability of the institutional bid estimate is being questioned by traders.
A number of analysts have begun to lower their estimates. More and more people are looking at corporate treasury titles. As a whole, the market is becoming more and more receptive. Over the past several months, that has been Bitcoin's path.
Technical considerations have not been the exclusive driver of the reduction. There has been a lot of emphasis on ETF redemptions as proof that the demand thesis isn't holding up.
The resumption of positive flows would, in turn, lead to heightened purchasing demand. Restoring trust would be helped by it.
What Next?
Not every ETF needs to have huge daily inflows to be considered successful in the market.
It is necessary to provide evidence that outflows are not the main factor affecting the market anymore. Just a handful of regular sessions have the potential to drastically change the mood around BTC.
The sustainability of Bitcoin's recovery from its recent lows may be called into question if the data reveals favorable tendencies. Instead of seeing the bounce as a reversal, traders may see it as a liquidity reset if flows turn negative again.
In light of this, the ETF table becomes an essential short-term Bitcoin indicator. While both the price chart and the flow chart are useful, the latter may be more so.
Currently, Bitcoin ETFs have given believers plenty to be hopeful about.
What follows is a market investigation into whether that event signalled a turning point or was just a temporary lull in an ongoing pattern of outflows.
When bitcoin prices are going up, the most important thing is to look at the bigger picture. There has been no sudden upturn in the price of Bitcoin.
Market players may start to wonder if the selling pressure is easing now that it has recovered into a range. That matters a lot since there were other factors outside Bitcoin's chart patterns that contributed to its recent drop. It came at a time when market players were keeping an eye on ETF withdrawals, institutional interest dwindling, and a trend towards other risky investing topics.
Validation of a price comeback in this case would be the movement of capital. In any case, the change may be undone quickly.
The demand for ETFs is now a more tangible market driver than in previous cycles.
Spot goods now link traditional finance with Bitcoin's built-in market structure. Those items can control supply and reduce volatility when they get regular payments. The spot market is compelled to shoulder a larger portion of the burden when they encounter asset outflows.
That is why the next few sessions are important.
There is strong evidence in the market for a larger reset if Bitcoin can stay above the current recovery zone and ETF flows strengthen. Another lower high might be in store if market volatility or falls persist, even though there is a chance of a comeback.
Next Moves
If the most basic best-case scenario holds, then buyers will see the current drop as a chance to consolidate assets, ETF inflows will no longer impede development, and Bitcoin will continue its resurgence.
An attention-grabbing title is not necessary. We need to be steady-handed with it.
It is also easy to see the negative outcome. Bitcoin may still be in danger even if its price hits $60,000 if ETF demand doesn't recover.
That would put less emphasis on possible benefits and more on keeping support.
At the moment, there is considerable wiggle room in the market. Bitcoin has stopped acting as though the slump is getting worse.
This is more of a cautious comeback than a clear change in trend, though, unless ETF flows provide significant support.
What Other Technical Readings Show
TradingView's Bitcoin technical analysis overview based on key data from moving averages, oscillators, and pivots for the coming week reflects a sell signal.
Both the short- and long-term sub readings point to a sell stance.
Separately, InvestTech's Algorithmic Overall Analysis and one to six weeks' recommendation gave a negative score.
InvestTech said, "Bitcoin has broken the ceiling of the falling trend in the short term, which indicates a slower initial falling rate. The token has support at $60,800 and resistance at $66,000. The crypto is assessed as technically negative for the short term."
