Bitcoin traded at $62,897, up 0.23% on the day, after a sharp wave of short liquidations pushed the market higher. More than $450 million in bearish positions were wiped out, helping lift the price back above $62,000 and giving the market a clear burst of momentum.
Flows into spot Bitcoin ETFs also turned positive again. After a 10-day stretch of outflows, U.S. spot Bitcoin ETFs posted a net inflow of $221.7 million on July 2. Fidelity’s FBTC led that move with $165.96 million in inflows, a sign that institutional demand had started to stabilize after a weak run.
Short squeeze drives the latest move
The immediate trigger came from the derivatives market. As Bitcoin rose, short positions were forced to close, creating a liquidation cascade that accelerated the move upward. The source material describes this as a sign of capitulation among bearish traders, a pattern often seen when oversold markets stage relief bounces.
Sentiment, though improved, remains fragile. The Fear & Greed Index moved from 20 to 22, which is still within the extreme fear range. That matters. It suggests the rally has not been backed by a full return in risk appetite and that positioning, rather than broad confidence, is still doing much of the work.
ETF inflows return as macro risks stay in view
The recovery in ETF demand has helped steady the market after a difficult stretch. A return to net inflows does not erase the previous outflow trend, but it does indicate that institutional buyers have not stepped away entirely. For Bitcoin, that has been an important support factor during this rebound.
At the same time, the broader backdrop remains unsettled. On July 8, the S&P 500 fell 0.28%, while tensions in the Middle East pushed oil prices up by 4% to 5%. The source notes that this mix complicates the inflation outlook and can spill into crypto pricing as traders reassess risk across asset classes.
Policy uncertainty and key price levels remain in focus
Federal Reserve policy signals are still part of the market equation. The source points to upcoming Fed commentary on possible rate adjustments as a factor that could shift sentiment and market conditions. Bitcoin’s current move is happening alongside those macro concerns, not outside them.
Regulation is another unresolved piece. The CLARITY Act remains delayed in the U.S. Senate, while Europe’s MiCA framework is still being rolled out in phases. That leaves institutions without full clarity on crypto capital allocation. In the near term, the source places support around $60,000 and resistance near $65,000, putting Bitcoin in a tight but important range as traders watch whether flows and sentiment can hold.