Bitcoin’s recovery to $64K on hold? KEY metrics flash mixed signals after leverage wipeout

Following weeks of subdued derivatives activity, Bitcoin’s late-June decline triggered the first meaningful shift in market positioning.

More importantly, aggressive short selling targeting this level was successful just twice, with one at $57.8K.

At no point did the spot selling pressure diminish enough to prevent buyers from recovering their footing. The Open Interest had initially increased substantially over the previous week, peaking at approximately 530k BTC.

Then, sharp liquidation quickly reduced most of the resulting leverage. Notably, Bitcoin prices began to recover from the low of $57.8K to a high near $64K.

As a result, bearish positions closed while fresh long positions entered the market.

These developments suggested growing investor confidence. Funding Rates also shifted from negative to slightly positive during the same period. That change indicated improving market sentiment without excessive leverage.

This sequence suggested sellers had begun losing downside momentum.

Persistent Spot demand also forced crowded short positions to unwind, adding fuel to the broader recovery.

A closer look at underlying demand

Bitcoin’s exchange flows offered another view of underlying demand. The latest data suggested exchange withdrawals continued slowing over recent months.

Exchange reserves climbed to roughly 2.66 million BTC from around 2.25 million BTC last October. The six-month reserve change also turned positive for the first time since September.

The trend suggested fewer investors were moving Bitcoin [BTC] into long-term storage. Instead, more coins remained available on exchanges.

Even so, exchange reserves stayed well below levels seen during the previous market cycle’s peak.

If fresh demand failed to absorb this supply, the growing exchange balance could limit future rallies. That left Bitcoin’s longer-term recovery increasingly dependent on renewed accumulation alongside resilient price action.

Final Summary

• Bitcoin’s [BTC] short squeeze reduced selling pressure, but sustained Spot demand remained the key driver of further upside.
• At the same time, slowing accumulation could limit Bitcoin’s longer-term recovery despite improving market sentiment.