Bitcoin, Ether extend relief rallies as extreme fear meets renewed ETF buying
Bitcoin (BTC) rallied, $50 short of $63,000, on July 3, and Ether (ETH) outperformed the wider market, pushing to $1,775. The end-of-week rally comes a few days after BTC fell to a 21-month low and ETH sank to fresh year-to-date lows. Highlighting the negative sentiment, the Crypto Fear & Greed index registered “Extreme Fear” at 11 out of 100.
Crypto Fear & Greed Index. Source: Alternative.me
That gap between the “Extreme Fear” reading and Friday’s bullish market activity is worth noting. On July 2, US spot Bitcoin exchange-traded funds (ETFs) took in a net $221.7 million, their largest single-day inflow since early May and a break from 10 consecutive days of outflows.
Spot Bitcoin ETF netflows. Source: SoSoValue.com
Futures markets fuel Bitcoin and Ether gains
The leverage side of the crypto market looks more one-sided than the spot buying data alone would suggest. “Funding,” the periodic payment traders holding bets on higher prices make to traders betting on lower prices when the market leans bullish, has stayed positive for the past eight days and has been climbing throughout this period.
Bitcoin open interest, funding rate. Source: Hyblock
The total amount of outstanding leveraged Bitcoin positions is also near its highest level in the past several days, even though the price has mostly moved sideways. Leverage building up without price making much progress is generally viewed as a caution sign rather than confirmation that a rally is underway.
Related: Bitcoin holds $61K after US jobs data report, AI sector weakness: Did BTC bottom?
Can bulls keep their pace?
Looking at the next few trading sessions, a few reference points stand out. On the cautious side, whether Bitcoin holds above roughly $61,000, where a large cluster of leveraged buy positions sits, matters, and so does whether Wednesday’s ETF inflow turns out to be a one-day event or the start of a new trend.
On the more encouraging side, a move back above $62,500 would put Bitcoin within reach of price levels where leveraged short positions become more exposed, and continued positive buying activity alongside a still-growing pool of leveraged positions would extend the pattern seen over the past few days.
Bitcoin liquidation heatmap. One-month view. Source: Hyblock
The overall market read is mixed rather than clearly bullish or bearish. Spot buying and a rebound in ETF flows suggest sentiment may be improving faster than the fear-and-greed number implies, but a market this deeply fearful and this leveraged toward higher prices tends to be more fragile. The upcoming US holiday-weekend stretch of typically thinner trading adds another layer of uncertainty to the current setup.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Wall Street giants collectively raise rate hike forecasts, US Treasury futures continue to fall, gold drops over 1% to break 4000
After the US October CPI exceeded expectations, Goldman Sachs and Nomura added a forecast for an interest rate hike in March next year, while Deutsche Bank included a forecast for a rate hike in January next year. Currently, the market has fully priced in a 25 basis point rate hike in December, with a 13% probability for a 50 basis point hike. On Wednesday, the US Treasury spot market was closed, but Treasury futures continued to fall, with corresponding yields rising by about 2 to 4 basis points, and spot gold came under pressure, dropping by 1.1%.
No Need to Worry About the Cooling Down of AI Data Center Construction? The US Import Boom Is Unlikely to Subside in the Short Term, Real Impact May Come in 2029
It takes an average of 4.8 years from finalizing investment to starting construction of a data center project, and an additional 2.6 years from construction start to becoming operational. Servers usually cannot be installed until after the building structure and racks are completed. For trade partners such as Taiwan (China), South Korea, and Mexico who rely on US data center supply chain demand, the inertia in construction timelines provides at least a one- to two-year buffer for future exports.
Federal Reserve Major Debate: When Should the Tenure of “Number Three” Williams End?
The main point of contention is whether Williams should step down in June 2028, upon completing a full 10-year term, or in June 2027, when he reaches the mandatory retirement age of 65. Analysts point out that the Federal Reserve Board holds ultimate discretion; if he leaves early, Fed Chair Waller would be able to assert greater control over the appointment to this critical position. However, forcing Williams to shorten his term could easily be interpreted as political manipulation. Williams himself is expected to serve until June 2028.
Crypto prices
More
